The Handoff

The Handoff

baton

If you’re a fan of the summer Olympics, I am sure you have watched plenty of track events – especially the exciting 400 and 800 meter relays.  Four athletes run in each event and hand a baton off to the next athlete until the race is complete.  Although the handoffs are usually done without mishap, it still happens from time to time; they can be simply sloppy to an outright drop of the baton that disqualifies the whole team.

In the financial relay of the USSAs rigged capital markets, from one corporate/congressional-captured chairman to the next, the handoff was exquisite.  Passing the baton from EZ-Al Greenspan to Backstop-Ben Bernanke was flawless.  It was so perfect, I’m sure that both Bernie Madoff and John Corzine blushed with envy.

In such a perfectly levitated & rigged market there was another flawless handoff that may have gone unnoticed: from monkey to cat.  If you have been trading for any length of time, you surely remember reading many stories of monkeys vs. professional fund managers in the late 90’s and early 2000s. 

Here’s how it usually worked: The pro's stock picks competed against four stocks chosen by monkeys flinging darts at the Wall Street Journal stock tables, which were pasted to a dart board.  At the end of six months, the results of the pro’s picks and the monkey’s picks were compared, with the monkey usually winning all contests.  As I recall, the monkeys did especially well in the late 90s and the mid-to-late 2000s, when EZ-Al first ignored the Nasdaq bubble, then supported every bank that made loans to the Nasdaq scammers and drove the world into a housing bubble during the late mid-to-late 2000s. 

During the Nasdaq crash, it may have been difficult for the monkeys to “generate alpha.”  It sure was for the one-way analysts (also monkeys) on Fraud Street…but I can’t quite remember.

Then came the GLOBAL stock market crash, Backstop-Ben Bernanke, and “the cat.”

Just recently a newspaper in England, the Observer, ran an experiment to see who would perform the best in a stock picking contest: professional equity managers, a group of children, or a cat.

According to the story - Each team had 5,000 pounds to invest in five companies from the FTSE All-Share index at the beginning of the year. Every three months, they could trade their stocks.

"The cat selected stocks by throwing his favorite toy mouse on a grid of numbers allocated to different companies," according to the story, "Investments: Orlando is the cat's whiskers of stock picking."

The cat, an orange tabby named Orlando, managed to win in the end. He wrapped up 2012 with a grand total of 5,542 pounds to the professionals' 5,176 pounds. The students finished less successfully with 4,840 pounds, according to the story.

I guess the essence of the story is that, when the market is rigged via excessively low interest rates to force stock prices in only one direction (up), even a cave man monkey or a cat could do it.

Yes indeed, the handoff from the monkey to the cat has been as flawless as the superior athletes in the Sumer Olympics…or from one central planning, statist, banking thief, to another.

Trade well and follow the trend, not the perma-bull OR perma-bear "experts."

Best Trades to you,

Larry Levin

Founder & President- Trading Advantage

TradingAdvantage.com