Gone Fishin'
By: Andrew Polsky
Tue, Nov 23, 2010
You are a shark. Not just any shark, a Great White. You live your life without fear because you, my friend, are the baddest creature in the sea. Your days are spent swimming with ease, the currents taking you where they may. The sea's bounty is your smorgasbord and you are on no one's menu.
One day, you're swimming along, when the pungent smell of tuna overwhelms your olfactories. "Wow" you think to yourself, "look at all this delicious food!" One tuna head. Two tuna heads. Three tuna heads. Just as your belly skin starts to tug, in the distance you see your favorite tasty fish slowly moseying along near the surface. Your instinct kicks in. You swim from the depths with the speed and precision of a Patriot missile. Bam, you take him out. But wait! Uh Oh...there's a problem. You can't get away, you're hooked! Next thing you know, some twerpy deckhand spears you through the face and the next day your fins are floating in a pot of soup in some dingy Taiji market.
Harsh as it may be, the reality is that over-confident and inexperienced investors, by and large, are the prey of institutional traders. Consider this: Global Investment Managers (pensions, hedge funds, mutual funds, insurance companies, sovereign wealth funds, etc) manage roughly $120 Trillion. That's with a capital T. To give you some context, the top 20 stock markets from around the world are valued at only $44.254 Trillion, and Global Debt (bonds) equal $82.2 Trillion. Obviously, institutional investors manage other assets (hard assets, real estate, private companies) because there is a still a bit of stock and bonds left over for the rest of us. What many people fail to consider is the strength of a select few who influence the markets, and how they bait investors into losing trades. Collusion is pervasive and many traders work together to achieve their agenda, and some of these traders have fewer scruples than you or I have.
I'm not writing this to dissuade you from participating in the markets, quite the opposite actually. There is a lot of money to be made by those who educate themselves and remain patient, waiting for the right time to engage. What I am advocating is to include in your decision making process something that cannot be quantified; how the market works and the goals of those whose expertise is baiting investors. If something seems too good to be true, it probably is, and if you think a price is too high, it also probably is. Nobody ever went broke selling early or sitting on the sidelines waiting for clarity. For those who have the experience and knowledge, the markets are much more than a casino, they are a hunting-ground where the strong live lavish lives, and the weak are forced to rely on social security.
There is a saying amongst poker players that says, "If you can't spot the sucker at the table, it's probably you." Remember that.
AI
