Blast From The Past

The old GoldGerb came out of hibernation yesterday to grace us with his presence. In his comment he linked to an old post of mine from late July 2011. Not sure why he remembers that one in particular – after all since August 3rd 2008 there have been exactly 3588 posts on this blog – plus one. And boy, have we come a long way since then! Some of you veteran rats are still around but the vast majority has long since washed out. That in itself should be a big lesson to us all. Since I launched this site I’ve worked my butt off every single day to keep us all in sync with the tape’s gyrations but no matter what you do, the sad truth is that some people simply aren’t destined to be traders. I wish it wasn’t so but it’s a zero sum game and in order for us to thrive we need those suckers to take the other side of our trades.

Anyway, Billabong quipped that my work back then sounds like it could have been written today, and after reading my own post again I would agree. A bit of Evil Speculator history if I may: About a year earlier, sometime mid 2010, I experienced a bit of an epiphany which resulted in a big shift in the approach taken here at Evil Speculator. All through 2009 I had clung to a generally bearish outlook which you can imagine was a pretty frustrating experience in the context of the first phase of a historic seven year bull market that would eventually propel us from 667 to over 2100. The ugly truth is that I had been wave wanking my way through 2007/2008 and had been doing extremely well in the process. As a matter of fact, my claim to fame back in those days was that I had predicted and traded the entire 2008 correction on the basis of my Elliott Wave counts. The place was hopping back in those days with several hundred comments per post being the norm. Basically I had created the second coming of the Slope and I was enjoying the attention as well as my five minutes of fame.

But of course it had all been illusion and all through 2009 I continued to rely on the same methods that had worked so well for me earlier. To my defense my own counts regularly beat those of Prechter and Hochberg. But that probably was mainly thanks to a predisposition to consider alternative scenarios (i.e. always have a plan B and then C) as opposed to some innate ability or prescience. And quite frankly the Zero regularly had been there since late 2008 to save my butt and those of my intrepid subs. But it all came to a point and one day I finally saw the light and promptly decided to abandon my crystal ball in favor of a minimalist technical approach that I still use to this day.

In any case – I thought some of you noobs may enjoy reading some of my earlier work. So here is my old post in all it gory. Enjoy:

Equities stared down the abyss this morning and then decided to take a step back as life may yet be worth living. So my condolences to all you perma-bears who yet again expected the end of the world as we know it. Please forgive my sarcastic tone but whenever ZeroHedge and its like switch into fifth gear and panic among retail traders hits a fever pitch, that is when I operate the best. Visions of samurai Mole mercilessly but calmly swinging his katana come to mind.

Look folks – emotions and mental masturbations – please leave all that to the losers. There are a ton of them, which is why their collective voices have a tendency to drown out any uttering of reason and reality. Trading is a zero sum occupation and every once in a while it’s time to for a trip to the slaughter house. Make sure you are not on board.

I yet have to understand what the big deal is. Yes, we are $14 Trillion in the hole – yes, we as a nation are screwed – and yes, most major banks across this blue marble we call home are fiscally defunct. The king is just not wearing any clothes – he’s streaking across campus! But shouldn’t that be clear by now? I mean, after years of kicking the can down the road, did it really have to come down to some artificial debt ceiling deadline for the markets to decide that being long equities may be a bad idea?

Give me a break!

Never ever forget what this is. It’s a finely honed game – one that is designed to separate you suckers from your hard earned coin. There are many participants: the Fed, the Wall Street power houses, the media pundits, the financial ‘analysts’, the rating agencies, the ‘economists’, the gurus, the wizards – it’s a bit like a cast of characters right out of Lord of the Rings! They all have their role to play and everyone feeds off each other. The house of card we have built is just that – an illusion that has a nasty habit of falling apart every few decades or so. Don’t you read history? Why would you expect anything else to happen this time around? The game is rigged and we all knew it before we decided to participate. So let’s treat it as such. When you go to play in Vegas – you know exactly what you’re in for. You can bitch and complain when you lose your last penny but they’ll kick your sorry ass on the street all the same.

So, if you’re looking toward the financial markets to reflect any sense of reality, please don’t kid yourself. What’s happening out there in the streets and what’s happening in the tape are two completely different pair of shoes. Once you understand that lesson and free your mind you will find yourself mentally liberated and able to finally see things for what they really are. The rules of physics and mathematics can be discussed and debated until the end of time but all the while they remain immutable, no matter what you or I may believe or not. Throw a rock up in the air and watch it fall back down every single time – no matter how much you hope it just once may not.