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.
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