F@#k Transparency…Just Stop Chasing Returns

  • Posted by
  • on September 2nd, 2008

Greed and Fear rule the markets.

There is no ‘FIVE Minute ABS’ and there is no ‘RED Light/Green Light’ way to trading to riches’.

My last two posts were focused on transparency, but in the end, all the transparency in the world does not stop the greed and fear cycles that rule our markets. People wanted Russia, Brazil, Oil, Coal, Agriculture thinking this time it was different. Billions of Chinese and New middle classes yada yada yada….

Today…return OF capital is all that matters despite little change in the real long-term picrure of the Chinese and the BRICK (Brazil, Russia, India, China and Korean markets). The US has the roaring Twenties, followed by a crash, followed by 60 plus years of glee. If you blew up in 1929 in your 20′s or 30′s, you missed some happy days of investing.

Honor price, not anything else, and you will survive as even the tiniest investor.

Today, commodity implosions butchered the last bastion of momentum traders.

If you chase returns, you end up in funds like Ospraie Commodities Fund, which just up and closed down 38 percent for the year – down a disgusting 27 percent in August. I am sure they had good transparency, I mean they have a f@$@$%king spokesman! Unfortunately, the billion dollar fund is not big enough for a risk control department.

The fund is not being run by Al Qaeda, although they would take credit for the carnage with glee. The spokesman is not thinking on his/her feet.

If you lose 27 percent of anyone’s money in a month, you can’t be allowed in the business of money management. Their needs to be an IMDB of money management, where these yutz’s must reside.

Nobody is interested in return ON Capital these days. One year ago, the warning bells were sounded with the first mortgage shock. In January, I took major hits for a second time in my trend positions and the price action (lack of new all-time highs) was signalling that capital preservation and return OF capital were the goals. You don’t need to get out at the top, but there is no worse feeling than selling into a panic. I honored my stops and focused on other aspects of my business and 7 months later have mostly watched. I don’t know when I stop watching and do more, but as I have written for the last 7 months, I will know when hundreds of stocks are busting to new all-time highs. I know we are not close.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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