War Games

By Todd Harrison  AUG 16, 2007 10:21 AM

The problem that comes from engaging in high risk behavior for which the consequences are absent, even if only temporarily, is that such high risk behavior begins to appear normal...


"May I have your attention please.  Mr. Hunter has brought it to my attention that morale may be a bit low.  That you may be a bit…on edge.  So I suggest this.  Any crew member who feels he can't handle the situation can leave the ship right now!  Gentlemen, we're at DEFCON three, war is imminent.  This is the captain, that is all."
-Capt Frank Ramsey, USS Alabama

Good morning and welcome back to the Crimson Tide.  With the world on edge and traders tickling the trigger, we're asking Minyans to stand up, calm down and keep their cool as the tape torpedoes into the Laurentian Abyss. 

Emotion is the enemy while trading - we've learned this discipline through bubbles and busts - and it only takes a momentary lapse of judgment to put a damper on our day.

It is with this collective call for calm—which is quite different from complacency—that we ready ourselves for battle.  Proper preparation always precedes a profitable process.  And junctures like this put that process to the test.

Chief of the boat, what say ye?

Alas, there's much more meat in there, but you get the point.  While many in the mainstream media offer these thoughts as "breaking news," the conditional elements have been cumulatively building for years.

There is no quick fix on this long road, only awareness and redemption.  If we each do our part and manage risk (rather than chase reward), the system will slowly alleviate the structural imbalances in place.

In other Random Thoughts…


No positions in stocks mentioned.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

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