Harry Potter or Hairy Spotter?

I couldn’t resist—it’s a corny play on words--but right on the money!

Is my Moneyman a stock market wizard or a mathematical genius with the uncanny ability to spot hairy situations in the market?

Here is my MoneyMan-ism of the week: The key is in Buying Fear and Selling Happiness

The trouble is not many of us can judge clearly when there is enough fear and when there is enough happiness in the air. I like formulas. I’m not a nerd—well maybe I possess geek-like qualities . . . but in all fairness, I think I’m pretty average. I kinda like formulas . . . velocity is equal to distance over time . . what goes up must come down, for every action there is an equal and opposite reaction. Picking good and making timely choices—it’s not just a gift he possesses. . . . by golly, there is a method behind his madness!

Last Tuesday, Dan invested 35 million into some puny tech stocks – only to turn around 2 days later and sell for a 7-8% profit. . . .roughly making 2.8 million and some change.

Two questions? How did you know to do this? And how come I didn’t get the memo???
;)

Dan says to keep in mind that “an oversold market can continue to go down and an overbought market can continue to go up-the real power is generated when it swings in a rhythm.” The “rhythm” that Dan speaks of is a distinct vibration--sensitive to a multitude of external factors.

Dan relates this rhythm of the market to that of a small child on a swing. Paying attention to the movement of his swing as it reaches its apex. In this particular case, he paid attention to the 10-day moving average—it is a simple matter of advancers vs decliners . . . . subtract decliners from the advancers, then take the 10-day moving average. . .positive numbers makes the numbers move up, a neutral market will make numbers come back down . . . the market moves at a rhythm with a tendency towards changing directions at any moment. What you need to learn is how to recognize the clues that tell you exactly at what point in that curve does the number start changing directions.

So who is more powerful? A Harry Potter, with a few magic tricks and spells, a slight of hand to create illusions to please your eyes—pulling quarters from behind your ear? Or the one who learns to see the world as it is, understanding the rhythm, spotting the hairy situations of fear and happiness—creating realities and putting quarters in your pocket?

Listen for yourself: the moneyman report

I'm gonna be at the BizRadio Money Fair on Jan 9th!!!!!! Come listen to some of the greatest financial thinkers of our generation!!!!

Christmas is coming, the goose is getting fat . . .

please put a penny in the old man's hat!

these days, a penny will not do--how bout a twenty ;) the holidays are upon us--two blinks and there's hardly twelve days left to sing about. So forgeddabout the dancing ladies and the lords-a-leapin . . . BRING ON GUITAR HERO III, MAN!!!

what a great time of the year for our economy!

everyone's spending, more and more people are saving time by shopping online--why not? no headaches, no mile-long lines, no crying babies or salespeople who always would rather be somewhere else than behind that register, providing you and me with quality customer service. . . YEAH RIGHT!

happy holidays to you and yours! I'll be writing again very soon!

Lesson Learned

So the Big DoorBuster Plan was a bust indeed! Chalk it up to being a “newby Black Friday shopper!” Driving by the BestBuy at midnight—there was already a line meandering around the corner of the building. Disbelief . . . that’s all I could feel and DOHHH! Maybe next year I will pack a turkey sandwich and park it outside in my soccer chair and forgo the thanksgiving festivities for an early place in line. Count me in as one of thousands of Americans who will overpay for an IBook that my son really needs!
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How did we get to be such patsies?

I heard an enlightening story on my Money Man’s show the other day. Dan was analyzing the reasons people are acting or reacting the way they are to the market’s current situation. The tale crossed between Freud and Skinner (anytime mom is involved you can betcha Freud thought it up—but the story had a definite behaviorist POV). Dan tells it way better than I do but here’s a recap . . . he says that inside all of us there is a little kid, a kid who is playing nicely as he was taught to play. He is good, responsible and obedient. He runs out into the street, very innocently after a ball and gets pulled back forcefully by the arm, spanked and scolded by his mother. So hard is her grasp that all he knows is the feeling of pain in his arm and the words--the harsh words are like daggers from the woman he cherishes and respects the most in this world.

Mom had acted out of love and care when she saw the oncoming car approaching you—she didn’t stop to think, she acts in your best interest and all you can associate with this experience is pain, shame and fear.

So we take that instance with us and store it away in our sub conscience. We are grown-ups now. We are responsible for our family and the financial well-being and futures of our children. We invest and save, we follow the market and it’s pendulum of ups and downs. We are good, responsible and obedient . . . we listen to what the market tells us to do with our money. Just when we are playing nicely—we are abruptly pulled back, jolted by a force that came out of nowhere to twist our arms and egos and punch us in the gut of our wallets and portfolios! Ouch!!!

You’re hurt. You did what you were supposed to yet you are in pain. So now you act out. You make decisions like a hurt, scolded child rather than a clear-headed, rational adult. Making emotional, desperate decisions—selling out when everything’s already gone down or being aggressive and buying more and more and getting burned like the guy who lost 6 billion dollars on a disastrous natural gas buy.

Dan’s message: Take control of your own mind.

Listen for yourself,
The Money Man Podcast: Short Term Trader's Perspective