“Having used brilliantly-crafted words to buy a few weeks of market tranquility, the last thing central bankers want today is to use Jackson Hole to prematurely signal the difficulties of implementing on their own sufficient follow-up actions.”-wrote Mohamed El Arian in FT
I want to share a quick thought with you today–a little trick in thinking that made a big difference in my trading a few years ago. One of the problems with traders is that we can be stubborn. This happens to everyone, and no one is ever immune to it. It takes a lot of confidence to pull the trigger, and sometimes much analysis and hard work has gone into justifying the trade. What do we do when contradictory information emerges? Well, sometimes the shock of seeing that the trade is wrong can even cause traders to freeze, with disastrous consequences.
I developed a little trick that might seem trivial, but it is very important. Simply put, anytime to you put a trade on, assume that the trade is going to be a loser. No matter how much analysis, how many supporting factors, or how perfect the pattern is, assume that the trade will lose money. This creates a profound shift in your focus because, rather than searching for and possibly discounting contradictory evidence (which can sometimes be as simple as “I just bought and now it’s going down…”), you will be open to and will readily accept contradicting information. Of course you will, because you assumed the trade was wrong to begin with. When you find confirmation for the trade, it is almost a pleasant surprise. Shift your thinking into this mode, and you will be much less likely to overstay your welcome in suboptimal setups that are not working out–you’ll be far more likely to do the right thing, which is usually to pull the plug on the trade (time stop) and look for a better opportunity.- wrote veteran trader Adam Grimes
Even without a new high-tech “fix” for aging, the United Nations estimates that life expectancy over the next century will approach 100 years for women in the developed world and over 90 years for women in the developing world. (Men lag behind by three or four years.)-wrote David Duncan in FT
While the industry seems loath to accept the idea that there should be any limits to its size, there are clear problems associated with scale. It becomes harder to devise distinctive strategies. Funds find it more difficult to trade in and out of markets without moving prices against themselves.
An even bigger concern is that size has turned the industry into what is known as a “loser’s game”. This is one in which victory goes not to the player with the best offensive strategy but to the one who makes the fewest mistakes – and has the lowest costs. Hedge fundery has become a loser’s game because the funds themselves are no longer the exotic and small offshoot of mainstream fund management they were in the 1990s. Increasingly, they are the market-wrote Jonathan Ford in FT
Because while I have no special expertise or experience in forecasting the vicissitudes of core European diplomacy and socioeconomic policy, I do know white people. And I know wealthy white people, in particular. And wealthy white people, American or otherwise, can always be counted on to compromise at the last moment so as to preserve the status quo. And that compromise will typically involve whichever option is the least painful, even if it means that more work must be done in the future (the proverbial can-kick). And we know that euro printing, even if it means a bit of inflation for the German middle class to wrassle with, is probably worth it if the task is preserving the hegemony of the creditors, rentiers, landed gentry and aristocracy. And so eventually, no matter how scary the headlines become or how volatile markets become in the short-term, you can expect a compromise that the wealthy and powerful elites (read: the markets) can live with. You can set your Swiss watch by it. Keep this in the back of your mind when the bullshit artists come on TV or puke their newsletters into your inbox. They are very intellectually intelligent, but they are also misanthropic social outcasts who do not and have not ever understood the way people work-wrote Josh Brown in The Reformed Broker