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I didn't feel that I was disagreeing with you. You only prove the dynamics of
dollar movement in relation to commodity pricing. Where would the price of
aluminum have to be today to be equal to the 1852 price. Things operate in both
directions. My comparison had to do with cost of living versus the price of the
dow or the S&P. We buy gas today instead of buggy whips. one has to do with
the cost of living in 1852 and the other with the cost of living today. Ice
cream was good then and now, for even with the production advances and packaging
advances, the price has still escalated. I try to keep things in context when I
can.
Certain commodities are subject to technological change and others are not. You
still have to grow beans, even if they are genetically altered. May prevent
some disease and prevent some frost damage, but bad weather can still kill a
crop and farmers can still plant other crops if the price drops below cost.
that is if the gov. doesn't pay them not to plant. Do you think that we should
genetically alter our Reps so that they can make some good decisions. Have a
good week end. Ira.
Robert Moore wrote:
> 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!!!
>
> ----------------------------------------------------------------------------
> -------------------------------------
> 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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