Are you a Transaction or a Relationship Investor? Knowing counts

Back in the 1980's when I was in training to be a broker for E.F. Hutton, ah yes the days when everybody listened to what E.F. Hutton said, in the very last hour of instruction a psychologist came into the lecture hall, and had us answer 20 questions, and then scored our answers. On the basis of our answers, a total score indicated whether we were the type of person that loved "transactions" or loved "relationship investing better." As he strolled up and down the isle...he stopped by me and smiled: "Yup he said, you are a transaction guy". A transaction guy loves interacting with the public, selling things, and whether it is a large sale for small sale, loves the thrill of closing the sale. I remember Phil Laut, the author of "Money is My Friend" asking the small business owners to try just selling a pencil or pen to someone...just anything small...just to get practice in the process...the total dollar amount of the sale was not important.. You might wonder why it mattered...yes I did love stocks and trading....and on some wild and crazy days, four hours was long term....I just got impatient to take profits.... On the other hand, one of my friends in the class, when asked what his marketing plan was, he responded that he planned to sit on a beach near his home, and just chat with the millionaires that lived nearby...I was stunned. No analysis, No detail or anything...and then he mentioned that one of his neighbors had already penciled in two million for him to start his book with...nice... The reason that half hour of instruction mattered for me, ---- I now knew what my button was, and knew that I needed to work on my relationship skills since they were a weakness...and now when I am looking for a full service broker, when I do look for one, I look for somebody to trust, and also for someone who has the ability to and capacity to develop a relationship long term...with a firm that likewise is interested in more than "churn and burn." Make a note of it.

In a Day of Crisis: Turn OFF the Noise: WATCH the tape:

One of the stark things about Wall Street is the disparity between the TALK and the reality....If you listen to the pundits, you hear nothing but confusing difference based on their stock positions...but if you watch the actual tape, or the stock transactions, you can see what folks are actually putting up their money to buy or sell...and there is a big difference between the two. In times of sharp volatility, such as tomorrow possibly, December 31, 2012, it is a wonderful time to try this out...just turn off your computer or tv screen to CNBC and just watch what the folks are buying or selling, and go with the flow.....I have bought a surfer poster just for the occasion so that I would not forget the lesson...Enjoy.

Nobody ever calls me when the market plunges:Tales From Normal MN: Fiction

This is the call

Every Day in Every Way...things are getting Cheaper; Tales From Normal, Mn.: FICTION

How does one truly hedge for a classic case of deflation???? this was the problem of the thirties, this was the problem that Bernanke did not want to face after the crisis of 2008, and after all this stimulus...this is still the problem that we may face...and it is unclear that we are any better able to solve it than Greece or Japan...and you? any ideas?

The Calm Before the Storm: 2012

It is a little weird, that in December 2012, after the failure of the political parties to resolve the fiscal cliff issue, there has been no plunge of the stock market that would reflect the dire situation that we are in as a nation....it is a little funny and weird...the vix which should reflect the volatility should be higher....everything should be more volatile..yet it is not..this is a little strange...make a note of it....

Be Wary...that is the Traders Edge

When one is young, and sharp, and a learner...the notion is that someday one will be supremely knowledgeable, be able to be the font of wisdom..ya..kinda the "Carnack the Magnificant" of Johnny Carson fame....the problem is that in the markets it does not work that way...the key is always to be on edge..to be wary...to never assume...to always be wondering...and that is the essence of the stress...and the success of the successful trader...as soon as one thinks one has the formula...knows everything...or is just a little complacent....all hell breaks out..and devastation comes shortly thereafter...make a note of it.

My Father loved to buy bonds

My father was a bond buyer...on the table next to his bed was a Guideon Bible, and a S&P Bond book...most of you would not remember that book, but brokerage firms gave them out for each stocks and bonds, and for bonds it listed the bond, all the details, and the rating of the bond. My father worked on the railroad---as a postal clerk, and had worked before and after WWII for them, and he had religiously saved so much a pay period and after six months or so he bought ONE bond for a $1000 dollars. Only after he died or got close in the bond panic of the 1970's did I learn of his bonds...and then because my mother was concerned with the spike upwards of interest rates...what would become of the value of these bonds---they had been terribly trashed....and it was a lesson that I learned and have faithfully passed on to my children...and to anybody that will listen. I also remember my dad saying during those final few years, that there was not anybody on Wall Street or in the firms that he could trust anymore...they did not know him and he did not know them...he had become a number and it terrified him.... The irony is for me that now that interest rates have been effectively held at zero, and the Federal Reserve has in effect targeted Seniors to make them paupers...as a way of saving the federal government money....the time has come full circle as the next move in interest rates is probably up....Stay tuned.