economy

THE BULL TREND AND ACE GREENBERG DIED AT THE SAME TIME.

You will be missed Alan!

Thank God they reinstated the up/tick rule.

Resilience: An ability to recover from or adjust easily to change or misfortune.

Resilient, ah! Resilient the traders would say or a salesman will rush into the trading room, during a busy day and say:

“What should I tell my customers? Did I miss some news? What’s going on? They should be down!

And a trader would say: Resilient, ah resilient.

We all use that word when we didn’t know why the

f—k—g market was up. I wonder if they still use that word. God I love Wall Street!

Several times in the past someone would look at me with strange look on their face, and say to me you have an anfractuous mind. I just see things differently.

Example: One day last week the market moved to new highs on big volume. Everyone says, wow that was a lot of buying!

Just remember for every buyer there is a seller but the market was on the plus side.

I’ll give you that but less than one percent.

Now 100 point move in the 70’s or 80’s meant something.  There were more buyers than sellers but not by much.

To me there was a lot of selling and I think the sellers were the Gnomes of Zurich. Just like that day in August of 1982, the start of the new Bull Market. I think that day the Gnomes were buying also, from my anfractuous mind.

Another twisted thought:

Suppose the plane that was shot down, the MH 17 from Malaysia wasn’t from Malaysia.

Oh! A small country. Not important??. Please 300 lives were lost and the news said the bodies looked as if they were turned inside out. Maybe the pilot did know that he shouldn’t be flying over the war zone but was diverted because of turbulence or a number of other reasons like a mechanical failure or worse a terrorist on board.

Let say it was a flight from the USA or how about China or some other big nation that could strike back.

It seems to me that they pulled the trigger because they feared it was an enemy plane too close to Russia.

Do you really think that the trigger happy guy checked to see where the plane was from before he fired?

I doubt it.

Next week an American plane could be diverted to that area and shot down. I am not trying to build a bearish case because I am looking for a correction; it’s just that I think you gotta be f—k—g crazy to be in this market. The world is coming apart.

I just don’t think you are doing your customer justice by being in this market, and, what about preservation of capital, your customer’s money. Losing it is a lot worse than not making more.

Some of my friends that I advise “the Oracles of Juniper Valley Park” said:

“Frank we are happy you yelled Buy over 4 ½ years ago. It’s the summer time and we have money in our pockets and we can sleep at night but if the market goes a lot higher, we all are coming down to Peru to beat the sh-t out of you.”

OEX story continue

I executed a buy order and bought 10 OEX puts at 2 ½

slightly out of the money. 2 or 3 weeks went by and the market worked its way higher. The options were trading around 1 ¼ – ½.

And I said: “I’m sorry we never talked about paying for the loss if they went down; I’ll pay you back in full”.

She said “I already sold them”

I said “why?”

She answered “I asked some of the analyst here, what should I do?  None of them were sure about which way the market will go except one analyst who said:” Frank is a nice guy but he is only a trader not an analyst, what does he know?”

She graduated from a nice college and was a CFA a certified financial analyst and he was a Columbia grad.

Well I promise you one; two or three lessons would come from the story.

Two weeks later the market was down big on the Thursday and Friday before the weekend. Unusual, in Bull markets Thursday and Fridays are almost always up, confidence disappeared and everyone in our department and the other Trading Departments, all left for the weekend with scared faces.

I said ” Oh Boy! The Yuppies are all going to talk to their friends this weekend and I know their final decision will be to sell everything figuring it’s better to have some money left to play with rather than nothing.

Monday was scary straight down and some salesmen were throwing up by the end of the day, some send their secretaries out to buy cameras to take pictures of the Quotron Screen, the closing prices were frightening. Tuesday there was a selling climax.

In spite of the movie The Wolf of Wall Street, released-I think- at the worst possible time, when the market and economy were struggling to come back, most of us in the business DO CARE about a customer’s money or the firm’s money.

I knew of one young salesman who committed suicide, a specialist on the floor who committed suicide, and a salesman who took a heart attack and died. Oh! And there was a guy in New Jersey who drove to his broker’s Merrill Lynch office nearby and shot him.

The OEX puts bought at 2 ½ for $2,500 dollars eventually traded at a value of $87,500 dollars. I don’t think I would have stay around that long.  But imagine if I bought a 100 or a 1000 puts.

Next blog: “Lessons”

In a CNBC interview  Ace Greenberg said he only wanted PHD’s working around him but he meant poor, hungry and determined!

Te amo Peru, the food here is unbelievable.

 

 

 

 

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One thought on “THE BULL TREND AND ACE GREENBERG DIED AT THE SAME TIME.

  1. Tom Isenberg says:

    Frank, Very, very nice. It’s getting better all the time. Does almost feel like the Summer of ’87. The calm before the storm. Note GM had (or said it will have) bad earnings (part of that is the payoff for the defective cars sold with the bad airbags). Time will tell. Keep up the great commentary. Tom I. (retired Senator)

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