Governor Ventura says: Organized religion is a sham and a clutch for weak-minded people who seek strength in numbers.
No offense to organized religion, but I thought Governor Ventura was talking about mutual funds. A mutual fund is a sham and a clutch for weak-minded people who seek strength in numbers.
A mutual fund is a sham, first of all, because the stock market is a sham. Mutual fund is a clutch for weak-minded people who seek strength in numbers. Unfortunately, in the stock market, there is no strength in numbers, only weakness. Those who seek strength in numbers are just following the crowd. But one needs to beat the crowd in order to make money in the stock market. Therefore, mutual funds are double sham.
Much has been written about the miraculously skyrocketing stock market. Some said that the market is rising because investors perceive less risk. Others say that the market is rising because productivity is rising. Here I would like to offer another explanation.
The stock market is rising because it is a pyramid scheme that is still developing. Remember pyramid schemes? -- And the unscrupulous neighbor who tried to get you to pay him $1000 so that you can later collect millions from other fools like you? Those kinds of pyramid schemes are sometimes illegal, and you know that you can make money from it only if more and more people can be recruited to join. But simple math tends to say that there just aren’t enough people on earth to keep that kind of scheme going very far.
The stock market is rising simply because more and more people are putting money into it. It's that simple. Like the illegal pyramid schemes, the stock market is dependant on recruiting more and more people (or money, rather) into playing in order to keep it rising the way it has been.
Actually, the stock market is a bigger sham than pyramid schemes: When a newly recruited fool bought some stock of company X for a higher price, supposedly everybody else's holding of company X stock is instantly also worth that much. What a joke. Even illegal pyramid schemes don't do accounting like that. In reality, your stock is worth that much only if YOU were the one who sold it to that fool or fools like him. Otherwise, the value of your holding is undetermined (until you sell it).
Pyramid schemes aren't all illegal. Some are even government sanctioned. For example, social security is a government sponsored pyramid scheme that takes money from late players and pay them to participants who had joined the game early. It too depends on a continuous recruitment of more and more players. Apparently, lately there has been some worry about future recruitment prospects.
Like all pyramid schemes, there will be one day when the stock market will be unable to recruit enough new players to keep it rising. And when that happens, it will crash and burn, like every other pyramid schemes before it. It is just inevitable.
All this from a guy who has just predicted that Qualcomm will rise to 600 in a month? Are you surprised? You shouldn't be.
Qualcomm is just another example of the pyramid schemes being played out in a smaller scale. Right now it is rising like mad, because there are still more and more people being recruited into buying it.
The moral of this story? Well, when I say the sentiment of a stock is bullish, I am really referring to the sentiment of the current market. My own sentiment will always be bearish because I believe that all of the high fliers, as well as the general market itself, will eventually crash. I am a perpetual bear.
Being a perpetual bear is not so bad. I will still play the momentum game while it is on, but a perpetual bear will always guard his capital jealously -- good for capital preservation, and will never be complacent enough to "buy and hold". Buying and holding a stock that is not going up like crazy just plainly doesn't make sense for a perpetual bear, because you are holding a piece of paper that doesn't even pay you interest, and you expose yourself to the risk of an eventual market crash.
The perpetual bear does not have any emotional attachment to the momentum stocks. When they turn and crash, the perpetual bear will be able to quickly reverse course and short the suckers.
And the perpetual bear who knows how to play the pyramid game will make money in this bull market.
Stock Update:
No offense to organized religion, but I thought Governor Ventura was talking about mutual funds. A mutual fund is a sham and a clutch for weak-minded people who seek strength in numbers.
A mutual fund is a sham, first of all, because the stock market is a sham. Mutual fund is a clutch for weak-minded people who seek strength in numbers. Unfortunately, in the stock market, there is no strength in numbers, only weakness. Those who seek strength in numbers are just following the crowd. But one needs to beat the crowd in order to make money in the stock market. Therefore, mutual funds are double sham.
Much has been written about the miraculously skyrocketing stock market. Some said that the market is rising because investors perceive less risk. Others say that the market is rising because productivity is rising. Here I would like to offer another explanation.
The stock market is rising because it is a pyramid scheme that is still developing. Remember pyramid schemes? -- And the unscrupulous neighbor who tried to get you to pay him $1000 so that you can later collect millions from other fools like you? Those kinds of pyramid schemes are sometimes illegal, and you know that you can make money from it only if more and more people can be recruited to join. But simple math tends to say that there just aren’t enough people on earth to keep that kind of scheme going very far.
The stock market is rising simply because more and more people are putting money into it. It's that simple. Like the illegal pyramid schemes, the stock market is dependant on recruiting more and more people (or money, rather) into playing in order to keep it rising the way it has been.
Actually, the stock market is a bigger sham than pyramid schemes: When a newly recruited fool bought some stock of company X for a higher price, supposedly everybody else's holding of company X stock is instantly also worth that much. What a joke. Even illegal pyramid schemes don't do accounting like that. In reality, your stock is worth that much only if YOU were the one who sold it to that fool or fools like him. Otherwise, the value of your holding is undetermined (until you sell it).
Pyramid schemes aren't all illegal. Some are even government sanctioned. For example, social security is a government sponsored pyramid scheme that takes money from late players and pay them to participants who had joined the game early. It too depends on a continuous recruitment of more and more players. Apparently, lately there has been some worry about future recruitment prospects.
Like all pyramid schemes, there will be one day when the stock market will be unable to recruit enough new players to keep it rising. And when that happens, it will crash and burn, like every other pyramid schemes before it. It is just inevitable.
All this from a guy who has just predicted that Qualcomm will rise to 600 in a month? Are you surprised? You shouldn't be.
Qualcomm is just another example of the pyramid schemes being played out in a smaller scale. Right now it is rising like mad, because there are still more and more people being recruited into buying it.
The moral of this story? Well, when I say the sentiment of a stock is bullish, I am really referring to the sentiment of the current market. My own sentiment will always be bearish because I believe that all of the high fliers, as well as the general market itself, will eventually crash. I am a perpetual bear.
Being a perpetual bear is not so bad. I will still play the momentum game while it is on, but a perpetual bear will always guard his capital jealously -- good for capital preservation, and will never be complacent enough to "buy and hold". Buying and holding a stock that is not going up like crazy just plainly doesn't make sense for a perpetual bear, because you are holding a piece of paper that doesn't even pay you interest, and you expose yourself to the risk of an eventual market crash.
The perpetual bear does not have any emotional attachment to the momentum stocks. When they turn and crash, the perpetual bear will be able to quickly reverse course and short the suckers.
And the perpetual bear who knows how to play the pyramid game will make money in this bull market.
Stock Update:
Update of stocks mentioned in this page:
| Stock | Date Mentioned | Price Then | Price Now | Gain % | Comment |
| 11/29/99 | 371 | 392 5/16 | 5.7% | Bullish | |
| 11/23/99 | 42 | 68 15/16 | 64.1% | Still Bullish | |
| 11/07/99 | 49 | 65 3/8 | 33.4% |
|
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12.06.99
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