One of my Minneapolis buddies and I talk every day about market conditions. He’s right on the floor, and I usually talk to him before the market opens, and sometimes during the day. I never bother him after the close, as he’s always down at the Wagon (a local watering hole), pounding down a few. I use him to get down my Minneapolis trades, and he gets good fills. We both marvel at how everyone sees everything through a set of filters that alter their own personal thoughts and emotions. He sees market moves that I wouldn’t have ever guessed, and vice versa. I didn’t see March Minneapolis wheat going to $25 the week before expiration, but he saw it as a slam dunk. He didn’t see the May/July spread, took the other side of me in fact, but in that case I was right and he was wrong. However, despite being wrong on the trade. I suspect he still made a few bucks legging in and out. He knows exactly what calls to sell, but I do a better job with managing puts. We agree that everyone can find a winning trade, and the trade can be obvious to one but not another. We both agree that it’s handling those pesky losing trades that get in the way that separate the winners from the losers. Since both of us have enjoyed a bit of moderate success over the years, we both respect one another’s opinions and are pretty close.
Sometimes, you become so into the market, narrowing your vision to get a closer view, you can’t see the forest through the trees.
Jeff
What did you mean by the last point, Jeff? I undertand the first part about the different viewpoints and filters - sometimes two people can make money out of different pieces of the same trade. In fact - case in point - OPPOSITE sides of the same trade. You made money going long gold recently, and I made money going short gold on the same basic moves using different techniques.
But I’m curious as to what was on your mind when you wrote the last sentence about the forest for the trees.
Cheers,
George
Comment by allocator — April 13, 2008 @ 1:56 pm
George,
When one drills down to view a particular market at a microscopic level, they sometimes lose sight of all that’s going on in other markets. I remember a few months ago, when I regularly reported that I was confused about the equities. The equities were going down every day, but I couldn’t see that. However, at the same time, I had the grain spreads nailed down and was one with that market. I missed the huge down move in equities, one move that I should have nailed down cold. I do realize that caring for Denise took a toll in my perception, but I still should have been short a bunch of S&P’s for a few months. In hindsight, I could have ended up getting a “free short” out of the S&P’s. I just didn’t see the move. I was aware that the move was going on, but I just didn’t see it.
Jeff
Comment by masteroftheuniverse — April 13, 2008 @ 10:07 pm
OK thanks. That clarifies it for me.
Cheers,
George
Comment by allocator — April 13, 2008 @ 10:28 pm