MightyFunk

Bear with me a lit­tle bit — there is a ‘con­spir­acy’ I will men­tion, but first I need to elaborate:

I’ve been away from writ­ing the last cou­ple of weeks because I’ve become highly inter­ested in invest­ing. My moti­va­tion is that as I run my own busi­ness, I don’t have some­one to hold my hand and tell me where my funds should be placed for retire­ment. Unfor­tu­nately, it’s some­thing I need to think about — but I sup­pose I’m all the wiser for it.

At first, I hired a finan­cial advi­sor, and spoke for a few hours about plan­ning. At the end of our dis­cus­sion, I told him to hold off future talks as I wanted to do more inves­ti­ga­tion (it wasn’t quite what he wanted to hear.) Going through my friends/Outlook con­tact list, I recalled that some­one I knew was an extremely suc­cess­ful investor who worked as a fund man­ager, CPA, and Wall Street trader at one point. He had also writ­ten a fairly exten­sive and suc­cess­ful book on invest­ing based on data.

I called him up and he gave me a pitch-free speech. He told me to read his book, read sev­eral oth­ers, and then look at ETFs (Exchange Traded Funds) which pro­vide the most recent alter­na­tive to an aver­age person’s 401k plan (I can go into fur­ther details, but I’ll spare you unless you really want to know — email me or reply to this post if you want.) Then he went on to tell me to use the TD Amer­i­trade platform.

So I began to do my home­work. A few books and many web­sites later, I found myself on TD Amer­i­trade plac­ing bids and asks — glued to my Level II charts, stock tick­ers, news, and CNBC. What started out as a small project for invest­ing turned into a much more detailed exper­i­ment of day trad­ing (the dif­fer­ence being a ‘day trader’ gen­er­ally is out for imme­di­ate prof­its ver­sus an investor is look­ing fur­ther down the road — most of the fun­da­men­tals apply to one another but they’re two com­pletely sep­a­rate beasts.)

The mar­ket recently has been so volatile (most com­pa­nies and stocks tank­ing) that I prob­a­bly couldn’t have picked a worse time to get involved. Most pro­fes­sion­als at day trad­ing are get­ting chewed up and spat out. Over all, I think I did a great job — I’m not really ahead nor am I really behind. I’m pretty much where I started finan­cially. Con­sid­er­ing this is a very rough time, I think I actu­ally out­per­formed. You also can’t put a price on knowl­edge either.

When I say that some­thing (in par­tic­u­lar a stock) is volatile — that means there’s been no sta­bil­ity — things jump from one sec­ond to another. You can feel how the ‘nation’ is feel­ing based on what you see on TV and the num­bers danc­ing all around you. There’s def­i­nitely a trend that you notice after a few weeks. The only TV chan­nel you HAVE to have on is CNBC — so you’re lis­ten­ing to peo­ple talk about cause and effect and the over­all econ­omy on a daily basis. When you leave the house, you can sense the mar­ket walk­ing around and observ­ing people’s faces. You can also vis­i­bly see it by sim­ply look­ing at the gas pump or the reduc­tion of cars on the road. You’ll see it when you order a pizza — because the price will have gone up (wheat prices have taken a beat­ing recently due to flood­ing, increased trans­porta­tion costs, and farm­ers sup­ple­ment­ing their crop in order to pro­duce their new­found ‘cash cow’ ethanol.)

CNBC Mass Hypnosis:

You’re prob­a­bly ask­ing your­self ‘what is the deal with CNBC?’ Well, here’s the deal. They are the mas­ter con­duc­tor for a huge orches­tra — the orches­tra being Wall Street and it’s investors. All a CNBC reporter has to do is talk about ‘how bad things look’ and the entire mar­ket fol­lows — you see num­bers drop within sec­onds. You have to fol­low CNBC, because if they make an announce­ment (ie. break­ing news or sim­ply ask­ing an ‘expert’ their opin­ion), wrong or right it may be related to what you are trad­ing and within a few sec­onds a com­pany and their stocks can drop off the face of the planet.

You may not believe it, but any trader will tell you that the finan­cial mar­ket is sim­ply based on opti­mism, pes­simism, fear, and greed. I know for cer­tain now that this is what hap­pens — it’s ridicu­lous that the entire finan­cial mar­ket is mostly effected by a col­lec­tive emo­tion and basic psychology.

If you don’t believe me, I’ll give you a sim­ple exam­ple — if you walked into a room full of upset peo­ple and stuck around, you’d prob­a­bly start to feel the same way. The oppo­site would hold true. The mar­ket has a ‘trend’ based upon over­all psy­cho­log­i­cal sen­ti­ment. You can argue whether this is cause or effect, but that’s sim­ply imma­te­r­ial what ini­ti­ates this response. The fact is this is what hap­pens — peo­ple are lem­mings. It’s pri­mor­dial pact mentality.

My first ‘to do’ item was to research ETF’s that pro­vided stel­lar per­for­mance this year. One ETF came up in par­tic­u­lar — A com­mod­ity (futures) ETF which was based upon wheat and oil. As you may know, lately all the rage on the news has been a focus on soar­ing energy and oil prices. So I’ve been fol­low­ing oil very inti­mately — each time the oil prices would go up I would make a decent chunk of cash (although I’m sure most of you weren’t too happy.) Each time oil prices went down, the entire stock mar­ket (most busi­nesses) would breathe a sigh of relief and their stocks would go back up.

So I’ve been watch­ing this bal­anc­ing act very closely for two whole weeks now — hang­ing on every sin­gle ‘related’ word on CNBC and my Level II news tickers.

That’s when I noticed some­thing more peculiar.

Pres­i­dent Bush to the res­cue — you’re actu­ally my f**kin hero for once:

Yes­ter­day, the oil com­modi­ties were trend­ing down heav­ily and gas prices were decreas­ing. The stock mar­ket rose. Most peo­ple were happy.

Right when I was about to take a cliff because of this good news (but bad for me), that’s when Pres­i­dent George Bush stepped in to save my ass. All he had to say was, ‘all options are on the table with Iran.’ I don’t know if this was quoted on CNBC at the time, how­ever it did come to me via the stream­ing Dow Jones News wire.

BAM. Light crude oil shot right back up within 10 sec­onds to above where it started in the day and the rest of the mar­ket took a tum­ble in uni­son. His sim­ple state­ment had a major rip­ple effect through­out the market.

Back to CNBC:

In read­ing about stocks online, I came across this one post in which some­one says, ‘did you notice that CNBC has this LARGE area on screen ded­i­cated to oil prices recently?’ Some­one else responded, ‘yeah, I thought it was strange…’ A cou­ple oth­ers noted it as well as myself.

So today is a new day. It’s Father’s Day week­end. Peo­ple all over have been beaten up and wor­ried about their jobs all week long.

At the start of the ses­sion (and through­out the day), I went look­ing for my all too famil­iar glar­ing friend now on CSPAN, the com­modi­ties OIL ticker. It was nowhere to be found.

It’s strange because Oil prices came down almost $2/barrel at clos­ing ses­sion from the day before. It pretty much remained down all day long. Also, the rest of the mar­ket pulled ahead.

I really sus­pect that this glar­ing ticker was inten­tional to pad someone’s own pock­ets. It’s a very hard thing to prove but it hap­pens. I’ve seen a few videos on youtube of exec­u­tives and ‘per­son­al­i­ties’ admit­ting to inten­tion­ally manip­u­lat­ing stock prices with repeat­ing words such as ‘bad and down’ through­out the day. If you do a search on youtube of ‘Jim Cramer fraud’ you’ll come across a video of him openly admit­ting to short sell­ing. A few of them have been mys­te­ri­ously removed. For those that don’t know, Jim Cramer is the talk show host of ‘Mad Money’ on CNBC. He also owns www.thestreet.com and files a ‘street report’ which is widely accepted across the indus­try as being ‘unbiased.’

Peo­ple often ask if this was ille­gal, then why wasn’t he pros­e­cuted. Well, when the house of cards came falling down around him — he was still stand­ing. Per­haps this has to do with the fact that he was New York State Gov­er­nor (and for­mer Dis­trict Attor­ney) Eliot Spitzer’s room­mate and friend in col­lege. Peo­ple have said that if it wasn’t for Cramer, Eliot Spitzer wouldn’t be where he was (before he got busted in the call girl scan­dal a few months ago.)

You can make what you want out of all this. I know what I think. A few peo­ple at the top make all the money while the rest of the pop­u­la­tion has to deal with their slight manip­u­la­tions and media deceit.

Any­ways, it should be a bet­ter hol­i­day than what most peo­ple fore­casted (I think because my friend the oil ticker was hid­ing today.) Rest assured, he’ll prob­a­bly be back Mon­day. Happy Father’s Day suckers.