Monday, August 31, 2009

Markets Finally Coming Back to Life!

Like many who read this blog, I save key thoughts and phrases I find over the years. I write them down when I find them in periodicals, old books, and sometimes even the internet (usually a poorer place to find brilliance in print).

I found the following missive yesterday going through 5 year-old trading records. I had written it in longhand on the back of one of my older silver charts. Moral: It pays to go through your old records.

You Can Do or Be Whatever You Desire.

You have to get disgusted. You have to make a decision to change. You have to visualize that change becoming a reality. And you must take the action necessary to make it happen.

Time is what puts everyone on a level playing field. It's a non-renewable resource; when it's gone, it's gone, and you can't get it back. I have 24 hours in my day - no more and no less than you do in yours. It's what you choose to do during those hours that will keep you broke or make you a fortune.

I know I saved the above because the thoughts definitely apply to trading, and anything else of value too. I will address some critical points from it in a few minutes.

The last few months have been busy for me, and very likely you too. With the new administration in Washington, many who were thrilled aren't as thrilled, the others who weren't thrilled are even less thrilled and the socialists among us are ecstatic. But this post isn't going to be about my strong reservations about government (in the specific tense or in general).

The fact is that somewhere between 10 and 25 Trillion dollars has been dumped into various places in the U.S. economy. Some of these places are banks, who will hold on to the money until they get the permission or certitude that they will be able to better their return than the interest they receive putting the “gift money” back with the government in T-Bills.

Other receivers of “gift money” are bank funds or government shills who are just waiting for conditions (like some healthy public confidence) that will enable them to invest in businesses and various stock entities. Either way, whatever these “gifted ” entities are waiting for eventually will take place and the money will be leaked into the economy.

Then the money will be returned as deposits and then be lent out again, only multiplied many-fold to more people/businesses and the madness will return that makes traders and speculators so valuable and happy for awhile.

The above is inevitable. Plus, the money that the general public thinks was lost in the last year and a half will somehow find its way back to the market and make a future economic boom that will be hard to imagine for the average currently numb and depressed mutual fund holder.

Economics 101: (Print out this rule and stick it on your trading wall/desk/computer/monitor)

Money, once created, never disappears. It is only transferred to a position of higher utility.

Meaning, the money that the majority of the baby-boomers had exposed and lost from their 401Ks and mutual funds got liberated by those who had a more correct view of financial circumstances and are currently applying to the “next big thing”.

The next BIG THING? Inflation on a scale previously never experienced, because there has never been this much money created in the world just waiting to be spent.

There are those who would beg to differ or fight about some of the points above , but the statements prove true when the applicable country's currency remains intact, a full business cycle completes, AND the country remains CAPITALIST in nature.

So, if you have time, patience and the certain knowledge that the U.S. will remain capitalist, there is no problem.

Do you have all 3? I do not, just the first 2.

There is another element necessary. You need sufficient capital – if you wish to profit from a capitalist system.

If you don't have capital for the coming inflationary times right now, get it somehow, soon.

Back to the paragraph at the start of this post about being able to be or do whatever you desire.

Right now it is popular in this country to blame the productive and the risk-takers for the problems many suffer. Never is it mentioned that every individual also has to think, plan and be responsible for their own assets and future opportunities.

The idea that the government should “take care of us” and be responsible for redistributing wealth is epidemic – and greedily seconded by the half of the country who prefers to receive – instead of struggle for something better by themselves with their own ingenuity. The “taking action” part is the crux. If so many are afraid to fail – with the result that they never take risks, then those who ARE willing to take reasonable risks have improved their odds to succeed tremendously.

What you choose to accomplish in your 24 hours a day will determine your success in the future. Especially in trading.

Life is trading. All based on choice – yours.

You can live wherever you want. Why not live in a place where there is low crime and plenty of money (and opportunities)? Instead of renting, you can buy a property that has a better chance of appreciation because of its location.

By your financial decisions you can create the best credit rating possible.

You can work wherever you want. You can educate yourself to whatever degree you wish and attain what success you demand of yourself. Maybe it will take time and effort. Make the effort if you wish the results.

You can choose the size of your family. You can marry well, or not at all.

You can be as healthy as your genetics allow by taking care of your diet and exercise.

If you trade and invest, you need to do more – care more – than the rest of the market participants to ensure you have an edge that you will act on – every time. When others stumble, you can get ahead. I was relentless for 18 hours a day for 5 years to make sure I had a viable edge for trading. Then it got just a little easier for the next 25 years. I care more and execute every time when others might just think, "Maybe the market won't go up this time. Maybe silver is in a bear market just like Bob Prechter says."

Did anyone say doing all these things is easy? No. But they are doable, attainable by those who are willing to take relentless action.

Beware a government that promises easy answers to success-for-some by handing the bill to others who will never benefit.

Thomas Jefferson must be spinning in his grave.

Joel Rensink

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