The trend is your friend. Price is the final arbiter. Market prices are reality. If you fail to respect the information contained in those last three short sentences you usually end up trying to find a source of funds to start another trading account.
But, despite those truths we can’t help asking some why’s:
1) Why is the euro at $1.43 when it’s clear the currency is creating huge pressures within the Eurozone, straight-jacketing countries like Spain with 20% unemployment, and hurting the export machine of Germany thanks to falling currency prices for its two major competitors, US and China?
2) Why do people believe Chinese economic numbers when a whole host of seemingly bright people who have seen China up close and personal tell us said numbers are mostly fabricated?
3) Why does oil surge above $70 per barrel when oil companies who know the market better than anyone tell us there is ample supply and little demand on the horizon?
4) Why is there so little anecdotal evidence among the people in your town suggesting the bottom in the recession is here?
5) Why do some emerging market currencies whose countries are 2-3 clicks away from sovereign bond default surge against the US dollar?
6) Why does the US government continue to eat the seed corn of entrepreneurism when new business and the jobs created therein are the only way to revive the US economy long term?
7) Why does the Japanese yen act as a safe haven while Japan’s debt-GDP towers over other all industrialized countries?
8) Why does everyone love gold even though it has risen only about 10% since it peak in 1980, while the Dow is up about 10-fold since then?
9) Why do we think enormous stimulus will work everywhere else when it hasn’t worked at all in Japan?
10)Why do so many believe the US will lose its currency reserve status when there is no real competitor currency out there to take over that role?
11)Why does the US government confiscate taxpayer money in order to subsidize US citizens who buy Japanese cars?
12)Why is it that former US Presidents now never seem to just fade softly into the night?
All these, and many other things, are a seeming mystery to me. But, as they say, if it were easy we’d all be rich.