Jase

John Hussman: The Market Is Not in Uncharted Territory

Roga,

Listen, I'm having trouble with a math problem. Can you help me prove this: "Every even integer greater than 2 can be written as the sum of two primes."

Thanks

Four Commonsense Clues to a Genuine Market Bottom

Sean M,

Take a look at Jeff Rubin's (CIBC World Markets) report that attempts to provide hard evidence that each major economic downturn this century was immediately preceded by a spike in oil prices. Note that I'm not saying that *I* believe that this is the case, I'm just pointing out a potential body of evidence that argues the point counter to yours. Make up your own mind. Here's the link to the report:

research.cibcwm.com/ec...

The chart/data that I'm citing is found at the bottom of page 4.

John Hussman: The Market Is Not in Uncharted Territory

vladimir,

It's difficult to respond to your post as your initial comments are "I don't know what your exact method is, but..." then the remainder of your diatribe goes on to challenge what you imagine my method to be.

What shall I comment on--the actual methods that I use or the words that you've put in my mouth?

When you elect to pelt me with comments like: "You seem to believe that making these kinds of returns is easy" and "Do you believe that you can establish cause and effect based on 8 trades?" and "I guess it must be easy for you but impossible for the rest", it suggests to me that you're having a conversation with yourself, not me.

Here's the spill:

1. The eight trades that I listed weren't the only trades that I've made this year, there were many more trades, and many, many were losers. Each losing trade, however, incurred a maximum loss of 6% on only a partial initial position size. In other words, if I intend to commit a total of $100,000 to a position, I will never lose more than $1800 plus commissions. No exceptions. I add to all successful positions using very strict guidelines and I'm not afraid of taking partial profits.

2. Yes, I do this full-time. I lost $30M earlier this year when the financing for my software company fell through (investment bank went tits up due to subprime exposure, among other things). The capital that I use to trade is all that I have left in this world--so I take trading very, very seriously.

3. I don't care about profits. All I care about is managing risk.

4. I have patience. More than 70% of my gains are realized in the last 20% of the time that I hold my positions. I'm still working at mastering the skill of sitting still; this is really, really hard. That said, I've been taking profits much more quickly during October and November. I'm sitting in a relatively high % cash right now.

5. Yes, I'm still in the market. Of the eight trades that I've mentioned, I'm still holding the BRK/B short, still holding USD against CAD, and I'm still short crude oil... there are a few others.

In your comments, you used the word "believe" several times. I don't trade what I believe. Frankly, the market doesn't give a shit what I think. I only trade what's right there in front of me, what I'm seeing occur. If a trade isn't going my way and I'm stopped out (100% of my trades have stops in place, no exceptions), all it means is that I was wrong. That's it, I was wrong. So what? I try to let it go like a bad first serve in tennis, my second serve doesn't have to be affected by my poor first serve--unless I choose to let it adversely affect me. Hopefully you get the idea.

I'm not going to comment on technical analysis here because my description of it won't make you understand it any more than you think you do now. As for being special, believe me, I'm not. I'm just interested in making some money and repaying my investors so that I can get back to my research in number theory.

Best of luck in your future trades.



On Nov 17 08:30 PM Vladimir Senkov wrote:

> Jase,
>
> Congrats on your 8 good trades and your high YTD return.
> Why do you think that any of this has something to do with TA?<br/>I
> don't know what your exact method is, but most TA methods I'm familiar
> with are an attempt at pattern recognition. Human brain is very good
> at confirmation bias. If you already believed that gold was "expensive"
> your TA would always confirm it.
> Do you believe that you can establish cause and effect based on 8
> trades? Have you closed all of them yet? My guess is no, since you
> are still in the market.
> You seem to believe that making these kinds of returns is easy.<br/>I
> guess if it's so easy you have probably already quit your day job.
>
> I guess it must be easy for you but impossible for the rest. What
> makes you so special? I know we are all special, but seriously?<br/>
>
> Good luck climbing the easy money mountain!
>
> On Nov 17 07:26 PM Jase wrote:

John Hussman: The Market Is Not in Uncharted Territory

chrisb,

Your comments regarding the futility of TA are amusing. "And did any squiggle-people predict the current bear market?" Yes, many did. But most of them wouldn't bother telling you about it. Unfortunately, you still think you understand what technical analysis is by reading about it from a Wikipedia page while eating a sandwich. It takes time to learn the art behind the science; in time you'll see the charts in a completely different way. This is about as kind a message as I can proffer considering that I gain nothing by telling you this. If you must know, this year I "used the squiggles" to:

- short gold (DZZ) at $970/ounce;
- short Encana (ECA) at $92/share;
- buy SKF at $89/share (more than once);
- short Goldman (GS) at $137/share;
- short crude oil (HOD.TO) at $119/barrel;
- sell CAD against USD at parity;
- short SPY at 130.00/share (via SDS); and last but not least
- short BRK/B at $4390/share.

The list goes on. How many long-side trades do you see? I've only been doing this for 18 months and my measly initial couple of hundred grand bankroll isn't big enough to crack the billion mark yet; this and this alone is the reason that I'm writing you--I'm still in the market. My 135% year to date return, however, suits me just fine. Doubt me? Send me your postal address and I'll fedex you my trade tickets. Take this advice: keep your toilet shut before discounting a method you know absolutely nothing about.