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An analogy and a surprise



On the way into work this morning, Linda (my car pool partner) and I agreed that re-entry from the holidays back into the reality of work is pretty difficult to do. Holiday cheer was clearly being replaced with post-holiday thought of work and what a tough year it has been for the markets and the vast majority of investors. So much movement in the second half of the year, yet from the low of July 15th to today, the prices are the same. In the middle were two 15%+ declines and rallies, but at the end the prices on the S&P 500 are basically at the same level...876. Clearly, this has not been the time to try to be a hero, especially given the highly emotional and significant swings.

Then for some reason my mind shifted to skiing with my son Timmy and a very good friend (and smart investor) and his daughter at a little hill in Northern New Jersey. It is the kind of ski area where if you know how to ski, it takes literally less than a minute to get from top to bottom. On this hill, they built a pretty solid jump for the snowboarders. Very high and rounded so no one gets hurt. Anyway, so this ski patrol guy gets on the wrong side of the jump to make the point that those going over it can't see him and should therefore slow down. The four of us stood there in amazement and were trying to figure out the guy's purpose for almost taking kids out and scaring them because you could only see him after you have gone over it.

Just as we were commenting and ready to finish the run, a young kid goes over the jump at an angle and takes out the ski patrolman. Steve and I looked at each other as the kids indicated how foolish the ski patrolman was because it served no purpose. The point is that it reminded us of the investment environment - even the best-intentioned action can lead to a negative result if you haven't prepared yourself for all the possible outcomes.

The one thing that I like to fall back on in the markets is that the skiing analogy is no different than any other life analogy or the financial markets because human beings don't become magical just because they begin investing. Everything in the financial markets can change on an hourly basis, but the only thing that never changes over time is human nature and it is important to use that as an ingredient in your investing or trading recipe.

As I was finishing this piece guess what happened? You got it - Toddo pinged me from the beach! He is having a great time, passes on his love to you all and was just online to check on his beloved RAIDERS vs. looking at the tape.

On the sunburn indicator, he is getting spotted burns on top --- not to worry Toddo, soon it will be sooooo much easier to apply the lotion on the scalp, and eventually it won't interfere with the Gel! Take my word for it.
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I wonder if Daisy has tan lines?
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