Taking A Big Swing

I clearly remember the Saturday afternoon I sorta lost my nerve at the races. I had five dollars – a measly five dollars (ten dollars in all) – each way on a horse at twenty-five to one. My sister, who was working on the stand with Australasia's biggest bookmaker at the time, had confirmed to me that virtually the entire Committee had bet on this horse, which had started in the morning at 100/1.

I even remember the name of the horse now so many years later: Todvega. And it was ridden by the best jockey I have ever seen, John James (J.J.) Miller.

That's J.J. Miller on the right

The horse won in what is called over here 'a Port Hedland Photo.' This means, figuratively that the horse was in a photo-finish but the camera angle was taken from six hundred miles up North in Port Hedland, and thus it appeared as if this horse's head was in front on the line – even though it might have been way behind in reality!

Actually, I was standing at the post and this type of thing was unnecessary this time; the horse won for real coming up on the inside. Funny, though, in the published photo the shadow of its head was in the wrong place! I guess the Committee were just making sure...

During the course of the running of the race, for the first time in my life ever, I was shaking. I had plenty of time in the running to ask myself 'what the hell was I shaking for?' I had plenty of money, ten dollars wasn't going to kill me if the horse lost. Hell I had thirty five thousand sitting in bets in the stockmarket and I slept pretty good. And then it struck me, the race was a proxy for the actual bets I was really making, namely those in the stockmarket. I went right out on Monday morning and sold up everything. By Thursday the World Stockmarket Crash of 1987 had fully unfolded.

Luck? Presentiment? I don't know and it doesn't matter. Many of my friends lost massively and I had everything completely intact and was essentially in a better position because of the new context.

I had no clue exactly when the market was going to crash, even though I thought it would sooner or later. I had taken steps long before and had raised almost a million in cash from external shareholders and controlled a public company ready for the situation – this was where my main capital was, not in just the thirty five thousand I personally was playing around with.

I had intended to post today about simple and quick ways to counteract stress and/or lack of energy. And I will do that presently – if anyone is even remotely interested - but this other thing instead is calling for some attention: Bernanke says there is going to be a long long phase of slow growth ahead for EVERYONE... He bases that, I assume on the utter control he has exerted on the bond market. I think he would be correct too but for one strange dissonance that I have been observing recently. There has been way strange range volatility across sectors and categories that never previously exhibited this kind of thing. Australian blue chips varied over more than twenty-five per cent during the last year. That, is an impossibility for me to believe unless there is something, in the words of the new kids in the quant cubicles, 'latent' in the story. Something in other words, hidden to us all, going on.

You can see it too in the gold price range swings of late – the amplitude has widened noticeably.

I am told this may be because of false volumes from 'order stuffing' and that eventually there will be a price breakdown and then, if there really is genuine investor buying, the price will revert to its long term up trend. No doubt at all in my mind that the HFT people are trying very hard to damage the gold price. And maybe they can do it. But it calls into question Bernanke's certainty about a long long slow recovery for EVERYONE. Because wherever there are such large and systematic range moves, there is massive profit opportunity and when there is massive profit opportunity there is strong growth for some, not weak growth.

 

It's time for your hands to shake, again, because Ben and the 'Committee Men' want to take Port Hedland photos...

 

Calvin J. Bear