Mel Gibson teaches trading

I’m off to the Far East (HK, Vietnam, Cambodia) for few weeks, so no more blogging until early April. It is sad, I know. For my final post, I will share a teaching from ‘We Were Soldiers’, a Mel Gibson Vietnam war movie.

Before Lt.Colonel Hal Moore (Gibson) leads his troops off to war, he is shown  making notes on the earlier mistakes of the French. I paused the DVD at this point and scribbled them down.

FRENCH IN INDOCHINA

-  Did not know the terrain

- Poor intelligence

- Underestimated the enemy

- Overconfident

- Did not fight on home ground

= MASSACRE

 

Vantage Point teaches trading

I saw this poster for Vantage Point and immediately thought of trading the markets, of how there are so many traders with so many points of view. There is also the question of the the truth: is  it the price, or is it where the price ‘should’ be? Does the truth even exist? One thing is for sure and that is, like the characters in this film, no individual has the complete picture.

A million traders, a million points of view, no truth.

Gold will plough through $1000

… reads the headline of a Financial Times article, on the day that gold prices plummeted some $20.

Reading beyond the headline reveals a more balanced picture from the quoted precious metals analyst, who says:

This is not a table-banging recommendation to buy gold; although the balance of arguments favours a move to the upside, any deterioration in sentiment could trigger profit taking. 

I don’t read the financial press much these days, and this article reminded me why. Almost every piece boils down to ‘we with think it will go up … but it may down’, or ‘we think it could go down … but it may go up.’ It is all very tiresome and repetitive. I appreciate this is essentially what market research is all about, but I have a question:

If any piece of research is worth its salt, why publish it to the public? My answer is that it’s mostly worthless, which leads to the catch-22 is that any research that is published isn’t worth reading.