The Advanced Genius Theory

Posted on 12/09/2011

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or……….Was Irvine Welsh’s Sick Boy actually on to something?

It’s been FAR too long and much has transpired in the markets. Too much for me to adequately condense here and now.

Most everything went lower, until the morning of October 4th……at which point I wrote this to a handful of friends:

I would….

10/04/11

buy the market (go long) on a trade here. Futures are 1072.50. I would used a 8 pt. stop (1064.50)- risk $400 per contract. I would exit trade at 1096.50 (looking for at least 24 points – or as close to 1100 as possible). 3:1 risk v. reward. Also I would find a creative way to be long crude oil. Ratio call spread or short puts.

My .02 This is an important level for the broad market.

Here’s what happened that day:

Here’s what has happened since:

Golf clap for me!

I’m not inclined (at this point in time) to recap the past. We got a monster rally off 1100 on the Cash SPU and off the 20% bear market high/low retrace. We’ve got more hope that Europe can and will get it’s financial house of cards in order. We’ve got improving labor and holiday sales numbers.

I think the Santa Claus rally came to a close AGAIN (12/7) at 1260 on the broad market. Until proven incorrect, 1100 is support, 1260 is resistance and 25 is too low on the Cash VIX. Period.

Moving on, I haven’t had enough time to write lately but in the past few days I’ve had a “burning issue” as they say in AA circles.

I have a tendency to think and speak circuitously. My thoughts will hover, sometimes briefly and sometimes for months…..waiting for air traffic control to bring them in for landing (in full disclosure, many never touch down which is why I enjoy doing this so much).  Mostly it’s just commuter traffic….honking…..tail lights….all on repeat. To some degree, I believe everyone operates like that, but most people (myself very much included) are apprehensive to bring that Boeing 787s (appropriately named Dreamliners) “in for landing”.

I think the Leonardo Da Vincis, Isaac Newtons, John Stuart Mills, Ben Franklins,  Ludwig van Beethovens, and perhaps, more recently the Steve Jobs types are all gifted with unusually high intellectual capacity, but what set them apart was their willingness to stick the landing on big ideas. Plenty of people are exceedingly bright, but their ideas are stunted by fear of failure and/or an unwillingness to try. (In the case of some, it’s the opposite…..the desire to try just about anything overwhelms their once advanced capacity – most easily illustrated by music types like Jimi Hendrix, Kurt Cobain, Nick Drake, or Shannon Hoon).

See, here I go thinking in circles again.

To be clear, I’m IN NO WAY insinuating that I’m a genius….my standardized test scores and college GPA put me squarely in the fat part of the bell curve. I have simply been reading things of interest lately that took me back a handful of years and reminded my of why it’s SO DIFFICULT to first put down that drink, pipe, needle, etc.. In our weakened mental state, there is an incredibly powerful belief that the drinking (or whatever substitute) makes us better, funnier, more creative, wildly engaging. I’m speaking specifically of the types (like me) who do gorilla math and say……”well, if ONE makes me feel like THIS, then if I do it 22 more times the fun will be exponentially greater”.

I remember, early on in my sobriety, thinking….wondering (I was panicking) about how I was ever going to have fun in the future. My self-perception was so skewed; my sense of fun was osmotically tied to and diluted by booze. Exhibit A.- cunning, baffling, powerful.

Three years ago, the Washington and Wall Street elite (a word which the Occupy movement has made pejorative) couldn’t imagine a world without Bear Stearns, Fannie Mae, Lehman Brothers, AIG, et all. These “venerable” firms and significant donors come (re) election cycle were perceived to be an indispensable component of a severely wounded capitalist system.

In hindsight, it feels like they were just spiking the bowl of punch at the Georgetown/K Street prom and we simply can’t shake the hangover.

I wish I had the time to adequately expand on this thought, and over the next week or so, hopefully I will. In short, I firmly believe that we need some new creative discourse in Washington, on Wall Street, and on Main Street (any cliche I missed there?). We need BIG thinking and we need it NOW. All the efforts to prop up the system on both sides of the Atlantic remind me of the Terri Schiavo case. Much grandstanding, wonderful sound bites for the rabid news media, boisterous wrangling by very vested parties……but the bigger issues is a “persistent vegetative state”. It dragged on for about 7 years and our economy has been on a ventilator since late 2008.

Something needs to change.

You can have incredibly amounts of fun without drinking. In fact, you can flourish.

We can also allow companies that overextend themselves to fail.

Extend and pretend may as well be the mantra for drunks and central bankers and politicians. I speak from experience when I say – it can go on for far longer than you expect, it’s absolutely exhausting, it’s incredibly difficult to imagine a new scenario, but it sure feels good when the hangovers abate.

In Danny Boyle’s first masterpiece – Trainspotting – Sick Boy makes his “unifying theory on life” argument while he and Renton convince themselves that a life without heroin is worth living….exciting even.

I don’t believe that the US has peaked like Sean Connery when he played James Bond. I think we need a team with a more interesting script though.

Enjoy your weekend. It’s good to be writing again.

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Posted in: Politics, S&Ps, Sobriety