Almost every day Russia is in the news. Yesterday more sanctions and I don’t like the things I am reading. I also hope the Russians love their children too. I hear they are good at hacking I wonder if they can cause a cyber-attack on all the computer trading systems.
Just think a bloodless war; nothing is more valuable than human life. This is one of the many Black Swans I mentioned.
I love going to the computer and hitting you tube, pick out someone I like, pick one of their concerts, put on my headsets, minimize the site, set the volume and start going through my 15 or 20 favorite web sites and mentally collect KIM’s (Keep in mind) and enjoy the concert.
I remember the day I bought the album “Synchronicity “. I played it all weekend and as the kids came in and out of the living room they would said “Oh dad! Oh dad! Oh dad!” they knew if I liked something I played it over and over, but they all know the Beatles, Pink Floyd, Dire Straits, Chicago and many more; anyway Sting was singing this song about the Russians, great lyrics. The concert was Berlin 2010. More recently I listen to Adele and Cold Play. I love her accent. I just started to listen to Bruno Mars and James Blunt and I’m really falling in love with Latin music from the Peruvian radio stations: Radio Romantica, Radio Inolvidable and Radio Corazon.
I am getting some nasty emails mostly Warren Buffet fans about my BH/BS Blog and some nasty emails claiming I put down Quants and MBAs. For the first group go out and buy yourself this book “The Battle for Investment Survival” by Gerald M. Loeb. He promoted a view of the market as too risky to hold for the long term, written in 1934: The Great Depression Era. I’m sure he and his customers got hurt. This was the first book I read at the start of my career in 1966.
True story, maybe we could learn one, two or three lessons from it.
It was August 1987; the market was enjoying a summer rally. Every Monday morning we got the new weekly “Mansfield Charts”. The first few pages covered market internals up volume, down volume, number of new highs and new lows but I really like watching the Advance – Decline Line Chart.
The Dow was going straight up and the Advance-Decline line was going down, a negative divergence.
Keep in mind the Dow is only 30 stocks, the A-D line was all stocks listed on the NYSE, about 2900 stocks at that time. The trend continued for 2 or 3 more weeks when I yelled: Its over!.
One of the young woman in the office said “If you are so bearish, are you buying puts and selling stocks?” I said: “My problem right now is that I bought a co-op six months ago in Chelsea on the corner of 20th St. and 7th Av. And I’ve been putting extra cash into it. I felt the neighborhood was ready to turn around and the area reminded me of South Philly; also there was a great unobstructed view of the Empire State building, just beautiful. It was well lighted and had a different color each month but the greatest site was watching it day and night during a heavy snowfall.”
Anyway she said:” Tell me what to buy and we will split the profits”. So I agreed and executed an order for her. I bought 10 OEX puts, slightly out of the money and expiring in 3 months at 2 ½ dollars, total cost 2500 dollars.
Since my first Big Market Correction Blog, all my friends sold their stocks, are in cash and some of them bought puts.
PS – I saw a great article yesterday. The analyst said: “Stocks are overvalued by 80%, about the same as in 1929, 1987 and several other dates. I’ll try to retrieve the article and his name, a great piece of work.
PS PS- Te amo Perú.
Reason No 1: the people are happy, humble and hardworking and the children all have beautiful faces.
To be continued… I have to talk to my lawyer first. Besides I just heard the bread girl! Its 7 am and she is little late.
Thank you G.W. for the information regarding my swollen ankles.
Love from Peru
M. Frank Anastasi