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Hi RTs,
This is so sad and tragic IF it turned out to be true.
I respect Mr. Martin Armstrong on his intelligence. His analysis on
Great Depression is still the best piece of study ever done on that
economic disaster in 30's. (I have a B.A. in Econ. so I know what I am
talking about. )
I don't know if "cycle" is a good method or accurate method. I don't
use it. I read Armstrong's website and his cycle theory and I was not
impressed. I believe that human actions (especially governments') can
move the market and disrupt the underlying cycles, if they really exist.
( Remember those 7 forex interventions in yen/USD cross in June and July
1999?! BoJ bought about 30 billion worth of USD and Euro to suppress
yen. And I was destroyed. )
In last September, I found his theory about a spread between US and
Europe equity markets hard to believe. In Sept. 1998, European stock
markets (such as German, French,... etc) were falling faster than
American stock market. Mr. Armstrong believed that in early 1998,
investors had been so bullish in Euro and European integration that they
had done a spread in stock markets: long Europe short US. Look back
Sept. 1998, it was quite clear that even when the equity
markets in Germany and France were sinking faster than the US, D.Mark
and F.Franc were shooting up against USD because money was pulling out.
That was the the reason I had doubts about Martin Armstrong's
description of what'd happened. Martin's essay basically pointed out
the following: "Investors rushed into Europe early in 1998 because of
the optimisstic outlook of Euro and European Union; and hence, they did
a spread: long Europe and short US (equity markets). So, when stock
markets everywhere were falling, the spread was unwinded. Thus, US
Stock market was supported by this unwinding. " Martin believed that
this unwinding caused European
stock markets to fall faster than US stock market. I didn't believe him
because if this were the case, D.Mark, F.France should have gone down!
I guess this teaches us to read critically. Armstrong has a lot of good
analyses. However, no one can be right 100% and all the time.
I think it is very dangerous to over-trade, no matter how confident you
are. I was very very very bullish on yen... then I was smashed by BoJ.
I wonder if Armstrong traded too heavily.
Mervin
Alexander Levitin wrote:
>
> Mr. Martin A. Armstrong of Princeton Economics was arrested Monday,
> according to AP.
>
> The charges (as I understood it):
>
> 1. Mr. Armstrong sold about $3 billion notes to foreign (mostly Japanize)
> investors with the promise to invest money safely.
> 2. Mr. Armstrong lost about $1 billion through "risky trading".
> 3. Mr. Armstrong commingle the funds with his firm account and issued
> "false statements" to the investors (with the help of some people in the
> Republic Securities).
>
> If the allegations are true (I will keep the "if" as long as I could) it is
> very sad news for people who knew Mr. Armstrong personally. I first meat
> Mr. Armstrong in 1986 through Foundation for Study of Cycles (he is current
> chairman of this foundation) and had opportunity to speak with him through
> the years.
>
> Mr. Armstrong was an inspiration for me: a handsome man of my age, reached
> tremendous success in his very early years, devoted student of market
> history, sharp witty mind, financial advisor for the governments,
> conservative republican. The fate seems smiled at him.
>
> I would not be a judge of temptations he went through (if allegations are
> true), but the one thing I will tell my son to include in his traders
> prayer: always have a money management stop. No meter what, losses of 10%,
> 20%, 25% are "easy" recoverable. Get out, sell everything, take around the
> world cruse, come back and evaluate the situation. You would never be
> pushed to the edge where man's heart enters the twilight zone.
>
> Very Sad Alex.
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