DummySpots.com

For those of you just visiting the site for the first time, sorry I killed it. To you, and to others who may be looking for some old article, here are some of my favorites from over the years. There’s much more, of course, if you care to browse through the archives month by month.

Oh, and note the dates on some of these articles, and remember what “they” were telling us at the time (like, don’t worry, your house will keep going up forever!); it’s nice to look back and realize I wasn’t so crazy after all. Well, at least not about that stuff.

Thank you for visiting. Feel free to email me: dummyspots… at… gmail… dot… com (you know what to do).

• Trading and the Personal Journey
  …The Market can be the greatest sensei you’ll meet in your lifetime, if you’re open to learning about yourself. Most of the time, most of us aren’t.

• When Talking Heads Say “Never”: The Impending Real Estate Crisis (16 Dec 2005)
  (The one that started it all.)

• The American Dream (Jan 2006)
  …[another one from the early days]… These material possessions may be as absurd as a 6500lb SUV for a single grandmother or cookie-cutter houses built wall-to-wall in the middle of a cow pasture (pardon, a gated cow pasture) for young couples…

• Overnight Repos: The Fed As Pawn Broker (12 Aug 2007)
  …Bubba Has A Liquidity Crisis, and Banks Are Bubbas Too

• Mother
  …She also, as all mothers do, played a major role in the construction of my “Wall”.

• My “Fed Fade Trade” Deconstructed (31 Oct 2007)
  …this trade works maybe 60 percent of the time. Perhaps 5 or 6 “Fed days” each year. But when it does (like today, and big-time in June), it’s possible to make a serious gain in only a few minutes if traded correctly.

• Christmas Shopping Without Debt Enslavement: The New Layaway (29 Sep 2007)
  …someone, somewhere has gradually convinced us all that it’s perfectly fine for individuals and governments alike to spend money they don’t have. Illegitimate Spawn of The New Deal, perhaps.

• People Are Strange
  …They say your true character is who you are when no one is watching. As it turns out, your true character also shows when you give money anonymously.

• Refinancing Subprime Loans to Prevent Debt-Deflation (06 Sep 2007)
  …one of my core beliefs is that true adulthood and maturity are the result of learning to accept and deal with the consequences of our own decisions. More importantly, it’s learning to consider the consequences before we commit to a decision, not just whether “I want it.”

• Out Of Office Itinerary: I’ll Be Between the Notes (3 June 2007)
  (One of my favorite vacation notices)

• The Importance of Stops (13 July 2006)
  …Our success doesn’t depend so much on which method we use to enter positions (except for “they say”). It depends on what we do with those positions once entered.

• Asian Currency Manipulation: How they keep their products cheap and our bond yields low
  …Why do I think this is important? Because at any point the governments of China and Japan could decide to reduce the rate at which they purchase our Treasuries or, God forbid, actually start selling those Treasuries rather than accumulating them.

• Subprime With Good Credit, It’s Still Just Good Old-Fashioned Greed (04 Dec 2007)

• Let’s All Move To Jeff’s Neighborhood (28 Aug 2007)
  …As a matter of fact, I’d argue that those same credentials often insulate people from reality, leading the “experts” to ignore even flagrant evidence if it contradicts them. Thus catastrophe sometimes results as these people begin to think of themselves as infallible.

• Speaking of Deflation… (19 Aug 2007)
  …

• Some Macro Thoughts on Deflation and Recession (16 Aug 2007)
  (this is the one where I called the 8/16 reversal, and also said it was NOT the long-term bottom)
  …So Was This The Bottom? I don’t think so. The macroeconomic factors haven’t resolved in the least. In fact, I’ve continually made fun of the talking heads’ using euphemistic language like “housing slowdown,” “slump” and the ubiquitous “soft landing” … we’re not even close to the last shoe dropping on the housing bubble

• Other People’s Money (OPiuM) (01 Oct 2006)
  …The temptation is to try to rush the process by funding our account with borrowed money. We’d be much better served to take the time to get our personal lives in order first.

• Guess That Answers THAT (26 July 2007)
  (Note this is at the end of July ‘07, and the Big Dummy smelled something!)
  …I think stocks are being sold, bonds are being bought and yields are dropping precipitously in anticipation of something we “average” people don’t see yet; some economic news which eliminates any possibility of the Fed raising interest rates (not that there is such a possibility right now anyway), and in fact points to the possibility of lowered rates.

• “Tame” PPI not such good news (Sep 2006)
  …We are due a recession- overdue if you count the one the flood of new money a few years ago postponed. I think the inverted yield curve is telegraphing that fact. But remember, we need something to recede FROM.

• Inflation, Deflation, Real Estate, The Dollar and Their Effect On Equities (15 Mar 2007)
  …That is not where we are right now. We have an economy frothing with money, but no growth to speak of (compared to what should be expected). What we have is an economy that’s trying to stall in spite of all the excess money. What happened to all that money, and where’s the inflation? That money caused a vast inflation in home prices, in case you didn’t notice.

• The Fed Should Not Be The Hedge Funds’ Insurance Agency (4 Aug 2007)
  …I laugh when I hear silliness like, “Do you think the housing slowdown is over?”… it’s not a slowdown, it’s a drastic reversion to the mean, and at best, we’re at the “end of the beginning,” with the fun part yet to come.

• Dummy Wisdom (Sep 2006)
  …

• Anomalies (3 May 2007)
  (note that the S&P was over 1500 when I wrote this)
  …this type of extension happens about as often as that comet comes around. Is the rubber band about sixfold overdue to snap back?

• Moving Averages: Let’s Talk TA
  …when it comes to Technical Analysis, moving averages are the most-frequently used indicators around. This also makes them some of the most misused indicators around.

• Turbotax Warning for Ameritrade Users, or How I Discovered I Was Rich
  …That’s right. After TT eliminated most of my deductions (hey, that 2% threshold is pretty high for a millionaire), it announced that I owe $1,312,256 in Federal Taxes. And here I was fretting over balancing my checkbook.

• What Would You Do If… (26 Sep 2007)
  …I don’t think I’d like the person I’d become if I had that much money right now.

• Jon Stewart and Alan Greenspan: Best Interview Ever (19 Sep 2007)
  …The coup de gras is when Greenspan admits that even with all the complex mathematical models, neither he nor anyone else is any better at forecasting now than they were 50 years ago!

• The Real Lyrics to Yellow Ledbetter
  …

• Are You A Compulsive Trader? (19 Dec 2006)
  …

• The Most Talented Portfolio Manager
  …In fact, over time — when you factor in the fees, taxes and other costs — he says your odds of beating the market in an actively managed fund are less than one in 100.

• It Ain’t So Easy (06 Nov 2006)
  …You can never filter the stocks down to only the ones that are going to move in the right direction. There is always the chance they’ll go the wrong way. You can only select the ones which your experience tells you are probable setups, then manage your losses on the ones that don’t play nice.

• The Unlived Life (02 Dec 2007)
  …

• But I Don’t WANT To Be Like You (02 Nov 2006)
  …”one day when you grow up you too can start trading stocks and can be JUST LIKE ME.” Really? Just like you? You mean, with my head up my own ass and all?

• GMTA, And They’re Trying To Tell Us Something (11 Oct 2007)
  …

I’m re-doing the “DummySpots is now closed” announcement as a post instead of a standalone page.

It was late and I was tired last night when I redirected everything to that little HTML page. A friendly email today reminded me that I had made everything inaccessible to everyone. Which is what I thought I wanted, what with pulling the site down and all.

But that’s kind of crazy. There may be something in the archives someone wanted to check even after I stop writing. (Like my call on the big August 16th bottom; looking back, I think that guy was onto something!). Or maybe something to do with StrategyDesk, the RSI(4) thing, or the Fed Fade Trade.

But most of all, it’s because I didn’t get the most important quote in! I was so tired I completely forgot my little mental outline by the time I started writing.

Here, you may want to look at that page first, so this’ll make more sense.

The Vonnegut quotes were supposed to be in the middle, and the Jandek thing was supposed to be at the end. But the first quote was supposed to by from my favorite movie of the last couple of years, Planet Terror. It’s from when El Wray first runs into his little Palomita again at the barbeque place, and he asks her whether she ever became a doctor. It goes like this:

That’s the problem with goals. They become the thing you talk about instead of the thing you do.

It’s sort of like something another writer said. Alan Watts or Gary Zukov, maybe. About how saying you want something is the same as saying you lack it, which mentally can make it seem inaccessible, and so you live your life “wanting.”

And that will not be the story with me and trading.

Geez. I’m tired tonight, too.

Ok, that’s it. Unsubscribe in your feed readers, look for me to turn up on the web again in the future, and thank you for stopping by my little place for a visit.

If deflation caused by the credit market collapse overtakes the easing Fed and the falling dollar (leading us into a painful recession), we’ll hear about it from CNBC and FoxNews about nine months too late. Is there any way for the astute individual (who knows what shows up in the “news” is always past-tense) to spot the breakdown as it’s happening?

There is- watch the commodities, they react first.

Keep an eye on the charts of Oil and Gold for a top, see the dollar find a bottom against… everything, and when you’re comfortable we’ve rolled over into the spiral, plan your trades accordingly. What worked brilliantly the last year or so may suddenly stop working, and you’ll find your trades hitting stops instead of profit targets.

That will mean it’s time to get out the old playbook and mix things up, because we’ll be on the field with an entirely different opponent.

Related Links

• Refinancing Subprime Loans to Prevent Debt-Deflation
• Dollar Stronger against the Euro?
• The Fed Should Not Be The Hedge Funds’ Insurance Agency
• Speaking of Deflation…

I just heard Garrison Keillor reading a poem on Writer’s Almanac, after the news and before the music on NPR. It made my day. Thought you might enjoy it as well. It’s a poem called “When I Am Old” by Ray Nargis from Almost Tomorrow. The link I’ve inserted is the NPR affiliate link to Amazon, so they get the two cents if you buy it.

Here are some excerpts:

When I am old I’ll drink whiskey in the morning
And coffee at night
And laugh and spit and swear wherever I want.
When I am old I’ll help Girl Scouts across the street
Even if they don’t want to go
And I won’t have a car
And I won’t have a bike
And I’ll walk everywhere.
…
When I am old I’ll tell people exactly what I think of them
And surprisingly, most of the time it really will be good stuff.
When I am old I won’t have a TV
And I won’t have a radio
And I won’t have a computer or a clock or a phone in the house.
I won’t read books and I won’t read magazines
And I won’t read newspapers and maybe, finally
I’ll learn something just watching the birds and the weather.

Just finished listening to the NPR article on the album Allison Krauss and Robert Plant have done together called Raising Sand. If you’re a fan of either (or both) of them, be sure and listen to the audio of the interview (it should be available by noon today). I especially like Plant’s explanation of why he doesn’t care for the term “duets”.

Krauss has what some have described as “the purest voice God ever gave a human,” which much of her work with Union Station seems to validate, and Plant, well as you can see from the pics in the article, he looks like death warmed over, but he’s a brilliant musician and music historian, and probably more intelligent and articulate than most any other rock star alive (listen to some of his past interviews if you get the chance, it’s like William F. Buckley with a sense of humor, and talent). That he, Jimmy Page, JPJ and Bonzo ever got together is one of greatest blessings in our musical history.

These two are supposedly already making plans for a 2008 tour. I’d certainly pay a premium to see that. Let’s cross our fingers.

My good friend Lloyd, or Mr. Flatwallet as he’s better known, announces he’s a convert to the church of DCA, and I’d like to raise my wine glass in toast.

Actually, I’d like to throw some toast and rice in celebration and pull the water gun out of my trench coat. (And dammit, turn the volume up on those computer speakers when you play the clips!!). I love the DCA thing man, I love it. If Jonathan Swift were here we’d be having potatoes for supper.

And I’m gonna see his challenge, and raise him. Beginning this afternoon, I started building what is to become the largest short position of my entire life. I’m not going to Get Rich or Blow Out Trying. I’m just gonna Blow Out, period.

Even with my modest little account, I should be able to leverage at least a few hundred grand worth of shorts using OTM Puts. Got the Qs and GE already. Next week, maybe more of the same, maybe some AAPL 130s. Whatcha think? Lets do this thing.

Quotes. I need quotes.

I’m tired,
tired of playing the game,
ain’t it a crying shame?
I’m so tired,
God dammit I’m tired!
(that’s Lilly Von Schtupp from Blazing Saddles)

When Marcell got up the tree to where the coon was,
He reached out with that sharp stick and he poked the coon.
But it wasn’t a coon.
It was a Lynx!
We could hear Marcell screamin’, “Haawww, somebody SHOOT this thing, HAAWWW!!”
Uncle Versie yelled, “Marcell, I can’t shoot up there, I might hit YOU!”
Marcell yelled back, “Well just shoot up in here amongst us. One of us has GOT to have some relief!
(that’s Jerry Clower from an 8-track in the early 70s)

Oh yeah, and let’s not leave out this one:

Well we shot the line and went for broke
With a thousand screaming trucks
And eleven long-haired friends of Jesus
In a chartreuse microbus
(C.W. McCall, Convoy)

It’s been a long, a long time coming, but I know a change gonna come, oh yes it will.

(That last one was a bonus)

Anyone else remember that song? “I’ve got a pocket full of quarters and I’m headed for the arcade.” So forget the market for a couple of minutes and give this old classic a shot. (Note- use your arrow keys to control him):

So far I can’t diagnose it, but some of the recent posts aren’t showing up on some RSS feeds. If you’ve got a sec, please feel free to drop by the site- some good discussions are evolving in the comment threads, and you may catch a post your Reader missed, although for the life of me I can’t figure out why it would.