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Ira, you are one of the smartest, most knowledgeable, and most generous
traders on this list, and I truly feel bad about disagreeing with you,
but...
I *am* talking about *real* dollars.
In 1852, aluminum was $545/pound (1852 dollars = $6000 today
dollars).
By 1855 it was $90/pound (1855 dollars = about $1,500
"today" dollars).
Today it is $0.65/pound
(http://nickelalloy.com/)
The price of Alunimum has dropped *** 99.99% *** since 1852, in real
dollars, and I don't think it is going back up!
If you were an Aluminum scaletrader (if there were such a thing) in 1852,
you would have been wiped out!!!
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Here is my reference:
"Charles M. Hall began work on the problem of reducing aluminum in about
1885, after he had learned from a professor of the difficulty of reducing
ores. Prior to the development of his electrolytic process, aluminum was
obtained by chemical reduction using sodium or potassium as a reducing
agent. This procedure caused the cost of aluminum to be very high. As late
as 1852, the cost of aluminum was $545 a Pound. During the Paris Exposition
in 1855, aluminum was exhibited as a rare metal in spite of the fact that it
is the third most abundant element on the earth. The cost of aluminum by
then had fallen to $90 a Pound.... It is reported that the very rich of that
era could flaunt their wealth by using aluminum eating utensils."
-- Chemistry, The Central Science, 2nd Edition, p. 577
----- Original Message -----
From: "Ira Tunik" <ist@xxxxxx>
To: "Robert Moore" <robert@xxxxxxxxxxxxx>; "realtraders"
<realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, April 14, 2000 7:37 AM
Subject: Re: [RT] Fw: OPT - averaging down on MSFT leaps
> Not in real dollars. When I was a kid a single scoop ice cream cone was a
> nickel. Today that same cone is $1.65 and the quality isn't as good. For
there
> to be equality the dow would have to be between 15,000 and 28,000. The
best
> deal around by comparison is a hamburger, 15 cents versus 99 cents at McD
or
> B.King. Of course once again there is a quality and size factor. As they
say,
> you can never go home again and this may be an old man reminiscing, but
> everything depends on your reference point. The same with trading, trend
is
> strictly dependent upon your time frame reference. Good trading and a
good week
> end. Ira.
>
> Robert Moore wrote:
>
> > Scaletrading commodities can also wipe you out.
> >
> > A technological advancement can completely change the pricing paradigm
of a
> > commodity. The price won't go to zero, but it could fall 95% and never
> > recover.
> >
> > The case I have in mind is aluminum. There was a time in the 1800's
when
> > the wealthy kept their aluminum plates alongside their gold and silver
> > plates. Aluminum was over $100 an ounce, if I remember correctly.
Then
> > the Hall effect was discovered, which allowed Aluminum to be extracted
> > cheaply from aluminum oxide ore, which is extremely abundant. Aluminum
has
> > never gone back up.
> >
> > With rapid advancements in biotechnology and nanotechnology, I forecast
that
> > by 2050 several commodities trading today will lose most of their
current
> > value, never to return.
> >
> > Robert
> >
> > P.S. As was pointed out, scale trading individual stocks is risky --
Even
> > more dangerous than scaletrading commodities, IMO. If you put a gun to
my
> > head and forced me to scale trade something, I guess I would have to
pick a
> > broad market index, like the S&P -- The market always comes back sooner
or
> > later.
> >
> > > ----- Original Message -----
> > > From: <Scaletrade@xxxxxxx>
> > > To: <ist@xxxxxx>
> > > Cc: <realtraders@xxxxxxxxxxxxxxx>
> > > Sent: Thursday, April 13, 2000 12:43 PM
> > > Subject: Re: [RT] Re: OPT - averaging down on MSFT leaps
> > >
> > >
> > > > I agree with you on one point for sure. I would be very reluctant
to
> > > > scaletrade stocks. Commodities, however, will never go to
zero...almost
> > > > guaranteed. Certainly there are still problems: carrying costs,
> > > commodities
> > > > that trade down to below multiyear lows, and stay there incredibly
long
> > > > periods of time, etc. But overall, most of my nicest profits have
come
> > > from
> > > > scaletrading commodities. Of course that doesn't keep me from still
> > > working
> > > > on other approaches.
> > > >
> > > > Larry
> > > >
> > > > In a message dated 04/13/2000 11:53:16 AM Pacific Daylight Time,
> > > ist@xxxxxx
> > > > writes:
> > > >
> > > > > Scale trading makes one very bad assumption. That what goes down
must
> > > at
> > > > one
> > > > > time go back up. That isn't always the case. And if it goes up,
it
> > > might
> > > > > not go
> > > > > up far enough to bail you out. I am personally familiar with one
> > party
> > > > who
> > > > > scale
> > > > > traded into 250,000 shares of stock and is still down over
> > $1,000,000.
>
>
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