EU had a strong session Friday, way outperformed the US by threefold, not much reason for it, I guess euphoria is contagious. The AU ASX also is in euphoria mode having finally broken the pre-GFC levels. If I didn't like the exuberance of markets on Thu I like it even less now. I did predict Jan to be a down month (also March) so I'm wrong so far but will say 2 things... 1. the month is not over yet, 2. fumes do make for good explosions but also indicate an empty tank. I closed off several EU longs on Friday, if next week can see another +½% or so in the EU then I'll be closing many more, then I'm sitting on my hands as I won't buy at these levels. When the DOW gets below 28k then I'll start looking for buys... sometimes the best strategy is to do nothing when things don't feel right.
Carlos Ghosn First a bit of background: I come from a car manufacturing background having spent several years in the management side of the industry so the Carlos Ghosn story was of great interest to me. Carlos Ghosn is a legend, right up there with the likes of Henry Ford, Enzo Ferrari, Ferdinand Porsche, Lee Iacocca and more recently Sergio Marchionne. 20 books have been written about him and his management methods, management school textbooks quote his M&A guidelines and many in the industry learned from him. His arrest in Japan was a shock and his escape was cheered, so when he announced he would hold a press conference last week, I was all ears, but now wish I hadn't tuned in. His mono-ranting did not impress, I expected a man of his reputation and stature to speak professionally and clear his name of wrongdoings, I was disappointed, in the end, I've put him at the bottom my list of idols. The guy did not defend himself, all he did was try to gather sympathy by quoting all the grate things he did and so ask "how dare" anyone accuse him of criminal wrongdoing in the face of all the greatness. Well, Mr Ghosn, it seems you have incriminated yourself, trying to convince everybody that the good cancels out the bad, taking this line just puts you above the law, and the law does not care whether you believe that having done more good than bad should exempt you from prosecution. The Japanese did indeed mistreat him by taking away some rights he should have been granted, but again, this does not diminish the validity of the accusation. Ghosn's career is over unless he is man enough to face his accusers and clear his name through the legal system... something he won't do unless he is really innocent which does not seem to be the case. There is something to learn from this story, something I also experienced first hand at grate personal cost. Foreigners that try to operate anywhere in Asia without a deep understanding and respect of the culture, or if they operate with the attitude that the Western way is superior, will find themselves unwanted and put under the microscope to achieve that end. Perhaps Ghosn should have studied the fate of the foreign CEO of Konica, who thought he was carrying out his duty but instead got voted out of office by the shareholders who did not appreciate his smearing of the founder's name with disclosure of missing money (some $2b) while the founder was the CEO. Even though the shareholders had skin in the game, honour prevailed.
Carlos Ghosn isn't a legend. Comparing him to the likes of Henry Ford and Enzo Ferrari is an insult to the latter's memories. It would be like comparing Trump, a half-senile fatso, bubble ass, lazy jabba the hutt'esque lizard to Leonidas, the King of Sparta. Or to Achilles, one of the greatest warriors of the history of humankind. Or even to Rocky, a ficticious Italian fighter, product of the fantasms of Silvester Stallone, a well known public entertainer back in his time. You shouldn't have idols, FXtrader8911. Idols make you weak. You should read Nietzsche's Twilight of the Idols instead of giving your money and energy to your local manipulative platform idols.
The best strategy is never to do nothing. To do nothing is to waste time, which is more precious than money. Money is infinite. Time is not. You wanna beat Jeff Bezos at being the world's first trillionaire? Then never do nothing. Doing nothing is a weakness, a problem that needs to be addressed. For while you do nothing, others are at work and doing things that may challenge your own views about this world. Don't give them the advantage of acting first.
Ok then, narrowing action to markets... what are you doing Monday? going long or going short? (doing neither is not an option)
Awards and recognition Ghosn has had numerous awards and honors bestowed upon him. Some of these include: In 2001, he topped TIME magazine's list of Global Influentials, beating Bill Gates and several other globally renowned businessmen.[241] In 2002, he was appointed a Chevalier of the Legion of Honour (Knight of the Legion of Honour) by the French government.[243] In 2002 Fortune awarded him Asia Businessman of the Year.[10][11] In 2003, he was named Man of the Year by Fortune magazine's Asian edition.[13] In 2003 Fortune listed him as one of the 10 most powerful business leaders outside the U.S.[12] In 2004, he became the first foreign business leader to receive the prestigious Blue Ribbon Medal from Emperor Akihito of Japan.[244] In 2004, he was added to the Automotive Hall of Fame.[245] In 2004, he was also added to the Japan Automotive Hall of Fame.[246] In 2006, Ghosn was made an Honorary Knight Commander of the Order of the British Empire.[247] In 2010, CEO Quarterly magazine listed Ghosn as one of the "Most Respected CEOs"[248] In 2011, CNBC listed Ghosn as Asia Business Leader of the Year.[249] In 2012, Ghosn was awarded the Grand Cordon of the Order of Ouissam Alaouite, an honorific designation to civilians in recognition of services that benefit Morocco.[250] In 2012, Ghosn received the Japan Society Award.[251] In 2012, Ghosn became the first person in the auto industry, and the fourth overall, to win a Lifetime Achievement Award from the Strategic Management Society, a non-profit group that promotes ethical and strategic business stewardship.[252] In 2012, Ghosn was awarded the Grand Cross of the Order of Isabella the Catholic, an honorific designation to civilians in recognition of services that benefit Spain.[253] In 2013, he was appointed an International Fellow of the Royal Academy of Engineering.[254] Honors and recognition, Henry Ford In December 1999, Ford was among 18 included in Gallup's List of Widely Admired People of the 20th Century, from a poll conducted of the American people. In 1928, Ford was awarded the Franklin Institute's Elliott Cresson Medal. In 1938, Ford was awarded Nazi Germany's Grand Cross of the German Eagle, a medal given to foreigners sympathetic to Nazism.[119] The United States Postal Service honored Ford with a Prominent Americans series (1965–1978) 12¢ postage stamp. He was inducted into the Automotive Hall of Fame in 1946.[120][121] In 1975, Ford was posthumously inducted into the Junior Achievement U.S. Business Hall of Fame.[122] He was inducted into the Motorsports Hall of Fame of America in 1996.[123]
I constantly hedge my positions. If current price is closer to my average buying price, I go short, since the probability of my long becoming profitable without intervention is greater than my short. In the contrary, I go long. If one side is winning, I pyramid the position. If I have nothing, I look at the hourly, daily and weekly charts and pick a side real quick for my first shot. It's called mean regression. With trend following, it's the only real strategy you can have in a trading system. Take two good traders, tell one to go long and the other one to go short. Eventually, they'll both make money. Side does matter that much, really. Methodology does.
Institutions are putting money into stocks and hedging the price risk. This is simply to capture a yield spread vs the ten year return. The corps are doing 1 trillion in buybacks as well. The thing is, the yield spread money isn't exposed to the price, 401k and investor money is though. The market could go down and they would still be getting their return above the return on notes. My point is, the investment is just cash seeking yield, it's not a bet on prices....