Gisi

Beating the Quants at Their Own Game

In my opinion, technical analysis is only useful in REINFORCING the right TIME to buy or sell a stock. I would never rely solely on techs in carrying out my trades simply because I don't think historical price movements are any indicator of how the stock is going to move a month, or even a week from now. I strongly believe that fundamentals drive a business, whether those are the company's customer base, global presence, management team, or whatnot. It's the stuff we can't control that typically causes huge price fluctuations... On the other hand, behavioral trading techniques, as you mentioned in the article, are most easily handled through tech analysis (though not necessarily all the time). And behavior is pretty predictable.

Great article!

Why We Need a Recession

Your article makes a very good point and I especially agree with your last comment regarding the Fed's obligation to interfere. However, this ultimately goes back to the underlying problems in American capitalism. The recession is not only necessary to move us through the economic cycle but also to, in a way, reinvent American values. A sort of a call back to reality.

I think it's absolutely ridiculous, for example, that as the price of gas increased, Americans become enamored with hybrid cars and saving the environment. Then gas prices dropped and now consumers welcome back with open arms those unnecessarily large SUVs (though clearly not enough for the Big Three). This just goes to show that Americans DON'T believe in saving money. They want to spend every bit they have and a lot of what they don't have if they can get their hands on it. What I'm seeing now is two extremes: one causing the economic meltdown and the other prolonging it.

What we really need is to encourage saving everyday, not only in emergencies. As the saying goes, buy an umbrella on a rainy day.