mistakes are the source of volatility

Look at how many people did not understand what they were buying or selling......they made a mistake ....they made a poor decision..... they did not do their homework...


When you don't do your homework, you are bound to make mistakes..

These THINGS Don't Matter Til They Matter, Then You get A sell Off.

In the Markets not everthing matters at the same time...There is a time and a place for everything.....Just because it exists does not mean it Matters....

This Week in the Modular World - 07/23/2010

This Week brought a prediction by the federal reserve that growth is slowing and the future accordingly is "unusually uncertain." Credit markets, Emerging markets us Markets etc.

The Market forces you to make a bet

The market is rarely if ever  in equlibrium with the economic fundaments. IT forces you to make a bet And either the fundamentals catch up and support your bet or yoare wrong. and lose. by the time it becomes obvious and reconciled there is no money to be made and the next bet is already being made.

In a bull market long mistakes get bailed out and participants get sloppy. In a bear market long mistakes get crushed.

The Message of the Market

The Market and the economy

These are two different worlds - and are rarely if ever in lockstep or equilibrium. The Market is a discounting mechanism the economy is an evolving complex adaptive system. If the market is ahead on fundamentals the economy can catch up if it behind on fundamentals the fundamental can deteriorate  or the market can correct but this can take years only when the divergence becomes economically dysfunctional.

The market as a mutating force in it's own right.

EQUITY MARKETS

The Market is catching on and now focused on Top Line Growth.

What remains to be done is to bring into being a new growth model, invent a new linkage 5850

3662 Rising interest rates

3760 printing money and inflation

3876 will the dollar collapse

Investment Implications

Experimentation and pragmatism must therefore become the watchwords in public policy, economics, and business strategy, even if this means a loss of consistency and coherence.

The abilityto operate by trial and error, to correct mistakes before thry do too much social harm, is the greatest virtue of the market system.

Tom Peters would call this thriving on chaos...

Implications for financial Markets

Interest Rates, currencies, stocks, commodities, sectors and countries.......

Sooner or Later the Financial Markets will have to reflect or at least resemble reality or the real economy.