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Foolish Speculators

Contempt for Speculators? Not Me, I Am One

Rick Pendergraft I received an email last week about my article “Let the Market Fix It.” While I appreciate the response, there was one part that disturbed me and I have highlighted it below.

Hello Rick,
Not all speculators are bad and not all professonals are the only ones in the know. I think a thoughtful person might succeed if he/she is careful and thorough, conservative in approach. I think the part you overlooked is that most speculators as novices allow themselves to become over-confident too soon, greedy, break out of their own game-plan too often, and then like any gambler try to recover their losses through further foolishness. You've lumpsummed your contempt onto any and all speculators. The question I ask is why? Such actions are always psychological and point back to the writer.

Ciao, Donald G.
I apologize if it came off this way, Donald. I don’t have any contempt whatsoever for speculators. I am a speculator.

I agree with Donald that too many speculators become over-confident and get greedy. I actually relish the novices entering into the arenas where I trade. It can make it easier to make money because great sentiment readings come from these people. Some of the most profitable trades I ever made are when the novices pile in a trade to the point that the only way the trade can go is counter to them.

I don’t hate speculators. There are many that do well in trading. However, too many speculators are under-educated about the investment vehicles they trade. To give you an idea, I have been paper trading mini-S&P futures for more than two years now. I just spoke to my account rep on Friday about opening an account to trade them for real.

So you see, Donald, our views are not different at all. I just expressed my view differently than you did.
Good trading,
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Sticky Rice Andrew Carpenter Ten thousands people responded to my request for their favorite song lyrics last Saturday, so we’ve had to hire a small Army of temps to compile your emails.

Well, that’s the April Fools Day version of why your musical memories are not compiled here today… the real truth is there was a computer glitch over last weekend that has temporarily (I hope, please) locked them away.

Guess the server saw Stairway To Heaven so many times on subject lines that it thought it was the killer STH computer virus.
Let’s hope the IT guys can unlock these files, because I am right curious about your favorite music…

The San Francisco Treat
Of course any further comment today must note the humongous buzz that U.S. Secretary of State Condoleezza Rice generated just an hour our so ago when she announced that she’ll run for president as a third-party, libertarian candidate.

I had figured her as a lock for VP with McCain. Shows you what I know.
Rice’s third-party bid likely has my dear, late friend Harry Browne expressing his ire by causing a thunderstorm somewhere… other than Tennessee that is.

Hope all you libers remember to drop Harry’s wife Patricia a line sometime. Harry may have morphed into a symbol as he grew older, but he was still a person… someone who worried about restocking the wealth he squandered on two presidential bids…

By the way, I say “squandered” only because Harry didn’t win.
Though Dave Boaz and the boys down at Cato have dubbed my vision of democracy as Libertarian lite because I can’t see how strict Libertarianism works for anyone but the rich… I find that it’s nearly criminal that the system is set up to deter a viable third party in the US… and that the media will only find itself attracted to a personally wealthy third party candidate who can finance his or her own campaign.

I know how that worked out for Harry… very expensive… though he made a lot of friends.
I’ll never forget one of the last times I spent a good amount of time with him. It was in San Francisco. One night there, we went to dinner with a business partner of mine.
My partner brought along a (now famous) writer who hails from Fort Worth.

This writer can’t handle alcohol. He’s so bad with it that he once tried to play grab ass with Van Tharp’s assistant, while she squirmed to get away, in front of 10 people in Delray Beach.
Anyway, while we were waiting for our table at (Harry’s favorite) Carnelian Room, this writer made sure everyone knew he was dining with a former presidential candidate.
Once at dinner, however, and lubed by some killer California Cabernet, the Texan proceeded to spend an hour telling Harry – point by point – what total s**t Libertarianism was and why everything Harry believed in was crap.

Always the gentleman Harry just smiled and took it. The next day he told me how great it was to see Lynn and me again. He never mentioned the dinner. He did note, however, that he usually went over better in San Francisco.

So, Rice as a third party candidate has a long, hard row to hoe.
In her announcement today she said she expects corporate America and small business to throw significant support her way.

Much of that support will come, Rice said, because she named San Jose investment banker Marc M. Auroni as her running mate.

Auroni earned his street cred as a high-tech sector venture capitalist at Faux and Fox. F&F arranged biotech BLU Gene Splitter’s 401% over-subscribed April 2006 IPO.
Don’t know why she picked this afternoon to announce … who the heck will believe it.
That said... best of luck to Rice-Auroni.

See you on Saturday.
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