Greed is Good  

Posted by Book Eater

Lines that struck me:

1.) From a friend's blog:

"But they're there. Just like the many unkempt places here, they aren't so rare as they seem."

2.) Don't get all giddy yet n the dollar rally.(From a WSJ article)

You would think a U.S. dollar rally would be a good sign. But this is all relative: Strategists say the euro, the pound and other dollar rivals are flailing due to the weakness of their domestic economies, rather than a strong U.S. outlook.

A “massive unwind of commodities-linked trades” is the reason the dollar is gaining against these currencies, writes Tony Crescenzi of Miller Tabak — as the buck has become “a major safe haven” in the face of a commodities slide

3.) Who's Gaining from Volatility?

Jim Simmon's Renaissance fund is up 7% last July, and up 48% YTD. (After taking out fees).

What does this mean for stocks? Well, if you're looking at financials, Goldman Sachs might well end up surprising on the upside when it reports third-quarter earnings next month. It's got the best traders on the Street, and it hasn't seen any necessity to rein them in. As a result, there's a good chance they're having a monster quarter.

---best traders on the street ? hmm... hope i can even an inch of those great traders of GS one day. one day...

4.) Fundamentals of Market Bottoms (excellent)
Bottoms are more jagged, the way corporate bond spreads are near equity market bottoms. They spike multiple times before the bottom arrives. Investors similarly grab for puts multiple times before the bottom arrives. Implied volatility is high and jumpy.
As a friend of mine once said, “To make a stock go to zero, it has to have a significant slug of debt.” That is what differentiates tops from bottoms. At tops, no one cares about debt or balance sheets. The only insolvencies that happen then are due to fraud. But at bottoms, the only thing that investors care about is debt or balance sheets. In many cases, the corporate debt behaves like equity, and the equity is as jumpy as an at-the-money warrant.

5.) Greed is good.

In the marketplace, if investors are so risk averse that they never touch equities again, the markets will take a long and deep recession before recovering. But if risk appetites are there... then we have a market. I observed this with Japan and a few articles I read somewhere around the net and I wished to relate it to something more common to mankind.. perhaps relationships and life.

If we stop being "greedy" getting the things we love/want, we'll always stay contented. There won't be innovation. There won't be determination. No one will go for the gold. We won't have the great olympics show Beijing just displayed to the whole world recently. Ok...people have to be greedy. We have to want someone only for us. We have to love something..only for us. We have to be a little bit greedy sometimes. ......ok...people who read this blog will get it. I'm just damn using every word I find from the net to relate trading with perhaps a lonely life haha.


lets just go watch the olympics. here's a pic...


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