Monday, March 26, 2012

Position Review

Another Monday over. The elliptical at the gym is losing the war against me, I keep getting stronger every time. Feel very good, and I think my concentration has become better.

Position Review
Anytime you are in positions you have to review where they are and if the story has changed from when you bought in. The story could be technical or fundamental. Here is my own review of my open 6 longs and with minimal comments. Click on any chart for larger view.







A mixed bag, but nothing here gives me reason to sell just yet. MBFI may be the weakest of the 6 at this point.

Have a good night.


GawainsGhost said...

To paraphase the immortal Andrew Dice Clay, "Techinical, fundamental, what's the f*****g difference?"

"I got my tongue stuck up this girl's ass, because you know how boring it can be when you're standing in line at the bank."

Ha ha ha.

I look at these charts, GYC, and what I see is chaos. Most people confuse chaos with random behavior, but it's not. There is actually a deep underlying order. What appears to be random is not really random. Subtle changes to the initial conditions, no matter how minute, cascade into dramatic changes in a complex system. That system will either self-organize into a newer, more complex system, or it may collapse altogether.

I would recommend three books.

Chaos, by James Gleick. This guy goes into the Dynamic Systems Collective, a group of guys at USC San Diego who developed an algorhythm to predict odds in cards, then went to Vegas and made a ton of money.

The Fractal Geometry of Nature, by Benoir Mandelbrot. This guy studied daily fluctuations in cotton prices going back over a hundred years, and noticed and noticed a pattern. That which appears to be random is not random, but rather a response to changes in the intitial conditions.

Thinking In Complexity, by Klaus Mainzer. I've recommended this book before. It's fascinating. He goes into detail on how complex systems work.

I could recommend more, but it's time for dinner. Tonight we're having meat patties, smothered in Worchestershire sauce, spiced with blackened seasoning salt and lemon pepper, sauteed with onion, green pepper, mushrooms, and garlic. And beans. Delicious.

EconomicDisconnect said...

Gawains, I know it can seem that way but I do see stuff in the chaos. Or I think I do!

GawainsGhost said...

Well, the thing is this. What is the stock market, or the price of anything for that matter, going to do? It's going to fluctuate.

When and why is the real question.

In a complex system, there are far too many variables to determine predictability. A complex system is, however, predictably unpredictable. Or unpredictably predictable.

An election, a new regulation, the repeal of an old regulation, some siesmic event, a change in the weather, investors rushing in or rushing out, war, famine, a false crop report, insider trading, flash trading, etc., you never know. It could be anything that affects the behavior of a complex system. And what will happen as a result to changes in the initial conditions is unknowable.

The essence of chaos theory is encapsulated in one saying. "On the west coast of Africa, a butterfly flaps its wings and thunder clouds clap in LA."

The idea is that one flap of a butterfly's wing--notice how minute that is--causes a disruption in the wind currents, which cascades into a dramatic event and results in a thunderstorm on the other side of the planet.

Anything can affect everything, and everything affects anything. It's a difficult concept to grasp, I know, like infinity--the essence of infinity is this: everything is infinite. Infinity is infinite infinities. It is not a number, because numbers are counts. It is rather a quality, limitlessness.

That's another book I would recommend. Achilles in the Quantum Universe: The Definitive History of Infinity, by Richard Morris. This guy studiess all the philosophers, mathematicians and scients who have grappled with infinity since ancient times. Almost all of them went completely mad.

Infinity plus infinity equals infinity. Infinity minus infinity equals infinity. Infinity multiplied by infinity equals infinity. Infinity divided by infinity equals infinity. It doesn't make any mathematical sense. That's because infinity is not a number but rather a quality.

Anyway, the lesson here is that, as an investor, you cannot focus solely on the numbers, that is the price changes. They're an illusion. You also have to pay attention to politics, world events, the weather, what have you, because any one or all of these can affect a stock price at any given moment on any given day.

Snap you fingers. In that instant, you've either made a lot of money or gone completely broke. This is the way of the world.

Keep doing your research. Study your charts. Notice patterns of behavior. But pay attention to everything else that is going on. Because anything can affect everything.

Caveat emptor, my friend.

GawainsGhost said...

By the way, here is my newer poem to my beloved.

Love is a light

That shines in the soul

Never a sprite

That whines in a hole

Love is a life

That climbs up a hill

Never a strife

That chimes to stand-still

Love is what we

Share--a distant shoal

Ever to be--

Dare to instant whole

Love is a dream

That cries out in spite

Never a scream

That dies in spotlight

Love is what comes

When all else is lost

Yet it becomes

No matter the cost

EconomicDisconnect said...

Gawains, thats amazing!