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Shiller Says `Easy to Beat the Market’ Long Term

Talk is interesting – host is a pain in the arse.

 
 

Gold

I posted the chart below in the MP Alumni forum last week.

Screen Shot 2014-04-22 at 8.18.28 am

 

I did so for the same reason someone drops a stone in a pond – they want to see where the ripples go. Often the issue with trading or investing is a closed mind or a mind that is set on a particular course. This comes back to the notion of the fixed narrative that I have mentioned many times before. As I said in the post that accompanied this image. If I were to define what being a trader was it would be the recognition of opportunities as they present themselves and to take advantages of those opportunities in a manner that offers the potential for profit whilst managing risk. Most situations present you with some form of opportunity, sometimes that opportunity is blindingly obvious and other times it is the opportunity to sit and wait. To take no action is an action.

With respect to this chart I see several things that may prompt me to take action in the future. For example, if gold were to drop below the 1270 mark I would consider going short. My view is that the bottom of the channel at around 1180 is wide enough for this to profitable if it followed through.  Conversely, if gold moved back up I would consider going long.

The central issue here is to be aware of opportunities as they unfold – too many traders sit and stare at the screen waiting for the market to actually tell them what to do. I am certain some traders sit there and wish the market would also take the trade for them so they didnt have to think. more importantly, so they didnt have to take a risk.

28 Killer Home Trading Desks From All Around The World

Apparently I have far too few screens and need to pull up my socks

 

This Guy Got $58 Million for 15 Months of Work

Henrique de Castro was booted as COO by Marissa Mayer after she personally poached him from Google about 15 months earlier. Mayer said de Castro “was not a fit and that’s a regrettable conclusion,” but he still walked with $58 million in salary, bonuses and stock.

Source – Time

I could be twice as incompetent in half the time for that sort of money. The interesting thing about this is according to this article Yahoo is worth approximately zero as a business. So my guess is that everyone from the CEO down is overpaid.

Ferrari F12 vs Lamborghini Aventador vs Aston Vanquish

 
 

Don’t Be A Member Of The Hedge Fund Club

I believe it was the American writer HL Menken who once said you will never go broke underestimating the intelligence of the American public. A statement that is probably a bit harsh on the Yanks but one that can definitely be applied to those who invest in hedge funds.

2013 was another great year for the global hedge fund industry. Net inflows were almost $64 billion and total assets reaching $2.63 trillion. Unfortunately, investors in hedge funds haven’t fared as well as the purveyors. Thus, we have one of the more puzzling anomalies in finance — the continued growth of an industry that for a long time has delivered miserable results for investors. The first quarter of 2014 didn’t off much of a reprieve.

More here – CBS Market Watch

Careful Who You Let Into Your Head

I try to maintain fairly diversified reading habits. I am a believer that some of the best books about trading never mention trading but rather deal with people and their fallibilities and their successes.

I have just finished The Dirt – a biography of 1980’s hair metal band Motley Crue. The back cover of the book proudly announces that they wereThe most influential, enduring, and iconic metal band of the 1980′s reveals everything a tell-all of epic proportions.This unbelievable autobiography explores the rebellious lives of four of the most influential icons in American rock history.

Clearly, the person who wrote this had never heard of Van Halen. Whilst reading it I was reminded of a quote from a book I had read many years earlier about an Australian SAS trooper in Vietnam. He said of those he met in basic training that a greater shower of pricks he had yet to encounter and this simple phrase sums up Motley Crue.  They are without doubt four of the most useless individuals I have ever read about who inhabit a world that is based upon drugs, copious amounts of money (most of it lost) and the degradation of women. By the end I was completely fatigued by this collection of hopeless, futile and ultimately pointless individuals.

I enjoy a good rock biography – No One Here Gets Out Alive the biography of Jim Morrison is my gold standard for this sort of book. This is despite my complete dislike for both Morrison and the Doors. What brought The Dirt into sharp relief was that at the same time I am reading An Astronauts Guide To Life On Earth by Chris Hadfield.  Hadfield is a former fighter pilot, engineer, and commander of the International Space Station.  To say that he is the archetypal overachiever is to perhaps undersell what he has done.

I must admit that when I first thought about buying the book I was concerned that Hadfield in some ways he might turn out to similar to the character of Lt Col “Bull” Meecham from the novel The Great Santini. A self obsessed arsehole of the highest order. What I found was a man of not only great ability but also great humility who understands that success comes not from wishing, hoping, actualizing or any other bullshit new age term you could think of but rather from having a defined goal and then working your arse off to get it. Hadfield knew he wanted to be an astronaut from nine years old and he set about becoming one and in doing so he picked up an extraordinary number of life lessons.

This is not a traditional biography; it is not a linear narrative that starts at childhood and ends at a point in the future. It is a coalescing of experiences from Hadfield early days in rural Canada to training as a military pilot to becoming fluent in Russian because if he was going to be working with Russians it would be a good idea to speak their language. It is also profoundly unusual in todays world because it actually a book about someone who is famous for having done something.

By the end of The Dirt I was completely over its main characters and would have gladly invented a time machine and gone back in time and drowned them all at birth. Part way through An Astronauts Guide To Life On Earth I was fascinated by how someone could achieve so much but still be perceptive enough to understand the role luck had played in his long career and how much of an impact his dream had on his family and his responsibility to them.

The juxtaposition between the two books also reminded me very sharply about whom you let into your life. I think there is actually only a very limited space within your psyche for ordinariness. The day-to-day world is ordinary enough without allowing the influences of others to pollute your thinking. This is not to say that one should inhabit the twilight zone of motivational thinking, which I believe to be rubbish. However, I do believe there is enormous benefit to be gained by reading about people who actually do things as opposed to those who think that being famous is in itself an end unto itself.

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