Thursday, April 26, 2012

There Is Bull and Then There is Bulls**t. Edited.

It is not the market action that is surprising. It is the reaction of various pundits who dish out various sermons that is surprising. Was it surprising that SPX closed around 1400? I would have been surprised if it did not. But so many have written the obituary of the up-trend and have gone short and are now surprised that the market is going to test the highs again. 

So, the market has killed some of the early bears and it is now laying trap for the early bulls. Or for those who missed the last rally.  Among all the noise, what caught my eye today was an article, stating that Gold will reach $10000/oz! Now that is something! I was so intrigued that I did dig a bit more. This article was written by an entity that is operating out of Ireland and fishing in North America for gullible investors. They proclaim to be dealers in precious metals and offer wealth management services. Obviously they are trying to manage their own wealth not yours.

I am gold bull myself and expect the price to reach $ 2500 in the next 12-18 months but $ 10000/oz? What are they drinking?  Does it remind you of Tulip mania? But a scam star will do its best to scam and we give it to them.

Educate and inform one more person around you and let this chain start working. Only through collective knowledge about the functioning of the market, we can become better investors.

Nobody can be right in calling the market all the time. The best investment policy is to follow the dominant trend and not get whipsaw or front run. Give up some of the profits in the beginning of the trend just to make sure that it is not a head fake. I understand that the most difficult part is to wait but with proper money management, risk management and trend identification we can be successful in the long run. Good trading opportunities come only 2/3 times in a year.

Thanks for bearing with my rant. We will wait and see how the market behaves for next few days and decide our course of action. A test of the high is always in the cards but we need to see what happens thereafter. Do not chase the bus. I would humbly suggest that you do not even dream of going long here or short. Just stay put in cash. In the mean time, start the process of educating one more person. Forward this post to someone you know who might benefit and invite them to read more at

Note: This post has been edited after one reader very correctly pointed out that I should not mock anyone else.It is OK to point out scams but it is not OK to criticise others who are also doing a great job of educating retail investors / traders. I myself have been wrong in my market calls in the past and I should realize that nobody can be right all the time. My apologies and thank you for pointing out my mistakes.
I stand corrected and humbled.