Louis Bachelier was right, you’re wrong as you usually are. His most brilliant insight and contribution to stock market theory is:
“contradictory opinions concerning [market] changes diverge so much that at the same instant buyers believe in a price increase and sellers believe in a price decrease” and he goes on to say “it seems that the market, the aggregate of speculatators, at a given instant can believe in neither a market rise nor a market fall, since for each quoted price, there are as many buyers as sellers”
As a result, he concluded that the market is a fair game where you have 50% chance of increase or decrease at any given time.
What’s this telling us? Half of you are totally wrong at any given time but believe you are right.
(Taken from Chart Addict’s Blog)
Look how far we’ve come from the lows, lows so low that people were scared of armageddon. These people were preparing bunkers, going to gold bullion, buying shit loads of canned goods for christ sake. I’m not here to be Dr. Dooms Day but we’ve come a LONG FUCKING way and a characteristic of a bear market rally is it usually sucks everyone in near the end as it’s gone on sooo long that those who missed it figure we’re done.
I’m smarter than that, and I’ve banked some good coin in the last few months. As a result I will continue to do nothing. It’s funny, I’ve been talking with a broker friend who said we’re going up this week, I said down. Yes, yesterday I got an email saying “I’m right, as I’m always right”. Dow futures are currently down just about what we “got back” yesterday.
Something I have observed of the human condition is this … When stock prices are high, everyone wants a piece believing they can only go higher, when they are low, super low people sell them because they are scared and believe they are going lower… The reality of the matter is both extremes are unlikely to be sustained and middle ground is the most likely “true value”. Interesting observation, no?
If you want to go buying equities, be my fucking guest, same applies for shorting them. I’m going to wait to make my money work because I can. Those scared of missing the pump usually get given the dump or some shit like that.
Tips hat, good day gentlemen.
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