Defining Imbalance....
When we look at the financial markets what is the most glaring thing that you generally identify these days?
Right. Imbalance.
In the essence of being a trader who relies on proper fundamentals to identify opportunity what does that mean for your trading?
It means that you must think outside the box in order to see things that otherwise wouldn't be observable. The reason I say this is you cannot use the same strategies that have worked in the past. All markets and I mean all of them are manipulated. Supposedly for the good of us all?
That remains to be seen but that is the way it is.
Like all these Perma bears that rush out whenever the markets say that we are due for a big correction if you followed even a remote inkling of their advice over the past ten years, you would have been killed in the market place. I am not saying they are stupid (far from it) but rather I am saying they generally don't know how to play a good game of poker with bluffing. In other words, they are the suckers at the table. People who have no problem going "all in" when they don't know who has the better hands.
If you are playing poker this is a sure way to lose your pot. It might not happen right away but it will. There is no system or method at all just pure shit luck. That never works in these sorts of situations for very long. It doesn't take the other players too long to figure out that you don't know what you are doing and they target you.
You see if you go back to the period of time in the late 50's to 60's you will see that the markets moved sideways for a very long time. A couple of decades. You can imagine that the talking heads all had their opinions on where the markets were headed day after day. It must have been sickeningly dull to hear their drones week after week.
I suspect that this is where we are now. A very long term sideways market punctuated with small new highs and small new lows. This could last for the next 10-20 years folks until the baby boomers are no longer with us. This is what I see. Inflation-adjusted the Dow is relatively where it needs to be right now. With commodities and interest rates being artificially suppressed it makes stocks look cheap even at these elevated levels. Hence this is why you hear all the time that stocks are still a good buy.
Do these guys who are recommending this really know?
I doubt it. Likely no more than I or you do but it all sounds good doesn't it.
You see imbalances create confusion. People need some sort of explanation even though there really isn't one but they still look for one.
The bigger problem that results from the imbalance as things are now is that we still are putting too much weight in the areas of financial instruments and making it harder and harder for people that actually produce something for a living. Like, say farmers. A money shuffler still makes a fortune and the farmer is going broke. That is a problem folks. Whether you realize it or not it is a big problem. You are rewarding the guys with the least amount of credibility while punishing the guy that keeps food on your table. Not right.
These are the cost effects for the imbalances. Cheers!
Right. Imbalance.
In the essence of being a trader who relies on proper fundamentals to identify opportunity what does that mean for your trading?
It means that you must think outside the box in order to see things that otherwise wouldn't be observable. The reason I say this is you cannot use the same strategies that have worked in the past. All markets and I mean all of them are manipulated. Supposedly for the good of us all?
That remains to be seen but that is the way it is.
Like all these Perma bears that rush out whenever the markets say that we are due for a big correction if you followed even a remote inkling of their advice over the past ten years, you would have been killed in the market place. I am not saying they are stupid (far from it) but rather I am saying they generally don't know how to play a good game of poker with bluffing. In other words, they are the suckers at the table. People who have no problem going "all in" when they don't know who has the better hands.
If you are playing poker this is a sure way to lose your pot. It might not happen right away but it will. There is no system or method at all just pure shit luck. That never works in these sorts of situations for very long. It doesn't take the other players too long to figure out that you don't know what you are doing and they target you.
You see if you go back to the period of time in the late 50's to 60's you will see that the markets moved sideways for a very long time. A couple of decades. You can imagine that the talking heads all had their opinions on where the markets were headed day after day. It must have been sickeningly dull to hear their drones week after week.
I suspect that this is where we are now. A very long term sideways market punctuated with small new highs and small new lows. This could last for the next 10-20 years folks until the baby boomers are no longer with us. This is what I see. Inflation-adjusted the Dow is relatively where it needs to be right now. With commodities and interest rates being artificially suppressed it makes stocks look cheap even at these elevated levels. Hence this is why you hear all the time that stocks are still a good buy.
Do these guys who are recommending this really know?
I doubt it. Likely no more than I or you do but it all sounds good doesn't it.
You see imbalances create confusion. People need some sort of explanation even though there really isn't one but they still look for one.
The bigger problem that results from the imbalance as things are now is that we still are putting too much weight in the areas of financial instruments and making it harder and harder for people that actually produce something for a living. Like, say farmers. A money shuffler still makes a fortune and the farmer is going broke. That is a problem folks. Whether you realize it or not it is a big problem. You are rewarding the guys with the least amount of credibility while punishing the guy that keeps food on your table. Not right.
These are the cost effects for the imbalances. Cheers!
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