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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.

NEW AGE BULLSHIT GENERATOR

This is brilliant and perfect for trolling something like Facebook simply click the Reionize electrons button to be served a fresh dose of New Age Bullshit.

Screen Shot 2014-04-16 at 6.10.41 am

 

ARE SPECULATIVE BUBBLES GOOD?

The New Yorker is getting a bit of a workout this morning – I must be bored.

Are speculative bubbles good for the economy? With much of the developed world still suffering the after-effects of the great housing and credit bubble, it might sound like a trick question. On Friday, however, at the annual conference of the Institute for New Economic Thinking, which is taking place in Toronto, I moderated a session during which several panelists suggested that bubbles can have an important upside: they help finance innovation and growth.

Having spent much of the past twenty years warning about the dangers of speculation, and writing two books about bubbles and their consequences, I felt a bit like Prince Charles presiding at a conference of contemporary architects. Nonetheless, it was an interesting discussion, and I thought it might be worth reviewing some of the arguments that were presented.

More here – The New Yorker

WHY DO WE EAT, AND WHY DO WE GAIN WEIGHT?

Here are a few of the things that can make you hungry: seeing, smelling, reading, or even thinking about food. Hearing music that reminds you of a good meal. Walking by a place where you once ate something good. Even after you’ve just had a hearty lunch, imagining something delicious can make you salivate. Being genuinely hungry, on the other hand—in the sense of physiologically needing food—matters little. It’s enough to walk by a doughnut shop to start wanting a doughnut. Studies show that rats that have eaten a lot are just as eager to eat chocolate cereal as hungry rats are to eat laboratory chow. Humans don’t seem all that different. More often than not, we eat because we want to eat—not because we need to. Recent studies show that our physical level of hunger, in fact, does not correlate strongly with how much hunger we say that we feel or how much food we go on to consume.

That’s something of a departure from commonly held views of what it means to be hungry. Traditionally, hunger has been seen as largely physiological: our body becomes depleted and, to maintain homeostasis—the body’s status quo—certain hormones are released into our bloodstream and stomach to signal to our brain that it’s time to replenish its resources. We eat. We digest. We use up our store of energy. The process repeats. “There are literally thousands of studies on the behavioral and biological effects of prolonged food deprivation,” Michael Lowe, a psychologist at Drexel University who has been researching hunger since the late seventies, told me.

More here - The New Yorker

NASDAQ 100 Market Internals

I posted this in the Alumni section of our Mentor program forum yesterday and thought I would drop it into the blog for others to see.

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I have just done the Market wrap segment for Talking Trading and as you would expect part of the focus was on the US and the difficulty tech stocks seems to be experiencing. In preparing for the segment i jotted down a few notes on the NDX and noted something interesting – the world has not ended. In fact the NDX at present is pretty much intact, what we have is a situation where hysteria has trumped reasoned and rationale analysis.

I have generated a few charts to highlight the point.

You can see that the long term trend of the NDX is still within a fairly well defined channel.

NDX Channel

 

Contrary to popular belief the NDX has had a series of pullbacks since the GFC – the remarkable thing is the three fold rise.

NDX Pullbacks

 

The NDX AD line is also above its 90 week moving average.

NDX AD Line

 

The 52 week Cumulative High-Low is also above its moving average.

NDX 52 Week Highs

The issue here is that we exist in the present – trading is a Zen activity as such there is little place for panicked prognostication. I can understand why the media become jumpy at what seem to be large falls. They see these falls outside of the context that is available to us. The 24 hour news cycle not only means news 24 hours a day but it also means a collective memory of only 24 hours.

None of these charts say that the NDX might not continue its fall over the coming days, weeks or months. That is not their purpose, their own purpose is to provide a little context to what is happening. They also provide a view of the markets true internals – this is what the market is doing. Not the narrative interpretation of what people expect the market to do.

General Advice Warning

Trading Game Unit Trust © 2002 – 2013 (ABN: 18 418 996 042) is an Authorised Representative of Weather Pro Pty Ltd, Rep No. 418664, AFSL 419155. The Trust is affiliated with The Trading Game © (ACN: 099 576 253), Louise Bedford, Chris Tate, Art of Trading Pty Ltd, Trading Secrets Pty Ltd and Trading Game Pty Ltd. This information is correct at the time of publishing and may be not be reproduced without formal permission. It is of a general nature and does not take into account your objectives, financial situation or needs. Before acting on any of the information you should consider its appropriateness, having regard to your own objectives, financial situation and needs.