Random Notes

The Usual Suspects For The Week

No. 1

Institutional Destruction

The short video clip by Mark Dice, linked here, shows how former successful and possibly even meaningful (on a rare occasion) movie productions/franchises are being systematically destroyed.

This phenomenon is not just Hollywood but nationwide.

To be specific, the same type of destruction is occurring in the ‘wealth management’ industry.

One of the latest salvos is this ‘initiative’ to make that industry more diverse.

The comments section talks about the ‘talent going elsewhere’ to start their own business.

That may be true but remember, ‘Fiduciary Responsibility’ requirements make sure the person with the least amount of knowledge is in control … the client.

Which brings us to the next bullet item.

No. 2

The ‘Average Investor’

Years ago, somewhere around the early 1990s, Tony Robbins interviewed Robert Prechter Jr.

One of the questions Robbins asked was this:

‘What should the average investor do?’

Prechter’s response was timeless. He said:

‘Quit being the average investor’

Absolutely brutal but true.

It was a polite way of saying to get busy; stop being the ignorant, lazy, average American.

Study and learn the markets. That way you won’t be subject to the corruption and villainy that permeates the financial services industry.

Don’t think that statement’s true?

Just watch a couple of episodes of “American Greed” and see how many involve financial scams that fleece an unsuspecting investment public.

In the above link, our ‘professional’ positions short in a biotech company, Orexigen Therapeutics.

If there’s one thing an aspiring market trader speculator learns at the start, it’s never, never, never go short on biotech (at least the individual equity).

Anything can happen … and it did.

No. 3

Flash Crash Ready

This just out from ZeroHedge; Is another Flash-Crash in the cards?

First off, let’s review what a flash crash looks like.

Link to the 2010, crash.

“Paper” = Big institutional selling

’79s are trading … all the way down !!! ‘

Even way back in my SeekingAlpha days, I proposed the next major market hit would be like nothing else.

Possibly a 20% – 50%, drop overnight or something similar.

Is it not better to plan, analyze and position (not advice, not a recommendation) with a Black Swan event in mind or just go merrily along thinking you’re as close to the entry door as the exit?

Stay Tuned

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

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