Capitalogix

Warren Buffett: I’m ‘optimistic about America’

Warren Buffett: I’m ‘optimistic about America’.

TODAY’s Matt Lauer gathered a round table panel of billionaire investor Warren Buffett, life strategist Tony Robbins, San Antonio mayor Julian Castro, Spanx founder Sara Blakely to talk about the year ahead for the American economy.

They seem pretty optimistic. 

 

Visit NBCNews.com for breaking news, world news, and news about the economy

 

 

What about you?

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What Would Going Over the 'Fiscal Cliff' Mean?

Going over the 'Fiscal Cliff' may be a fear, but the debt ceiling is much scarier.

 

Reports are that a last minute deal is imminent.  What happens if they do not agree?

 

Sources: Moody's Analytics, Tax Policy Center. via The Washington Post.

 

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Your Weekend Reading Linkfest

Lots of good stuff this week to distract you from the bad.

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• Why it’s Not All Bad to Be Bored. (NYTimes)
• Alec Baldwin Puts the 'Fear' Into Christmas with Glengarry Christmas Spoof. (CX)
• Spotify's 10 Most Popular Tracks of 2012. (TheWeek)
• The Purpose Of War? Thought provoking commentary. (ABC)
• Human Modification. Scientists are experimenting with different ways to enhance humans. What's possible? (TheBrowser)

 

Trading Links:

• The World’s 200 Richest People. (Bloomberg)
• Investors’ 10 Most Common Behavioral Biases. (RPSeawright)
• Market Data Firm Spots the Tracks of Bizarre Robot Traders. (TheAtlantic)
• Book Recommendations from Nassim Taleb. (FarnamStreet)
• With Profits Dropping, High-Speed Trading Cools Down. (NYTimes)

Steven Colbert's Take on High Frequency Trading

Stephen Colbert interviewed Christopher Steiner, author of "Automate This: How Algorithms Came To Rule Our World".

As you'd expect in a Colbert segment, there is lot's of 'truthiness' mixed in with the humor.

For example:

 

Some say all this computer trading is dangerous, but I say it's actually safer. Because if the stock market ever crashes again, instead of brokers jumping out of windows in a panic they'll simply turn on their computer and see the soothing message, 'error 404, economy not found.'  What's the worst that could happen? 

 

To hear the worst that could happen, watch this video.

 

The Colbert Report
Get More: Colbert Report Full Episodes,Political Humor & Satire Blog,Video Archive

 

Here is a link to Steiner's Twitter feed.

 

Here Are Some Interesting Links to Read This Weekend

The Fiscal Cliff Meets the Mayan Calendar ... Worried?

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• Measuring an Employee's Worth? Should You Consider Influence. (FastCompany)
• LinkedIn's Social Mapping Tool. Who Influences Your Career? (Forbes)
• Are You A Psychopath? There is an assessment test if you're curious. (TheDaily)
• 33 Geeky Insults You Can Use (Almost) Anywhere. (Wired)
• How Machines Will Use Social Networks To Gain Identity, Develop Relationships and Make Friends. (TechCrunch)

 

Trading Links:

• Forget the Cliff, 3.8% Obamacare Tax Is Coming. (AdvisorOne)
• Mortgage Rates Drop To Record Lows. (LATimes)
• If Regulators Crack Down on HFT, Does Low Latency Lose Relevance? (TelecomRamblings)
• Iran Cyber-Attacks Against American Targets On The Rise. (Slate)
• Young and Jobless. Unemployment in the U.S. is over 17%. But in Greece 60%; Spain 55%; Portugal & Italy 35%; and France 25%. (WSJ)

Best CyberMonday Deal on Apple - Perhaps Apple Itself?

There we were at the Cowboys game. It was a beautiful day.  I was feeling terrific because I was with my two sons. The crowd was cheering ... and I had a great thought: 'Let's get a picture of this'.

 

Perfect ... a random series of events had led to a satisfying crescendo ... and I captured the moment.

 

 

It wasn't so random.  Despite a difference of four years and two stadiums - the result was similar (if not predictable).

History doesn't necessarily repeat itself. But it often rhymes.

 

It Is True In Trading As Well.

 

The Hype Curve is an interesting map of human emotion.  Below is an idealized version.

 

 

Here is a chart of Apple going back to 2004. Note the similarities. 

 

For a deeper analysis, see this post by Market Oracle.  Here is an excerpt explaining the framework.

Classic economic theory dissects the economic cycle into four distinct stages: expansion, trough, decline and recovery. A stock is no different, and proceeds through the following cycle:

• Stage 1 - After a period of decline a stock consolidates at a contracted price range as buyers step into the market and fight for control over the exhausted sellers. Price action is neutral as sellers exit their positions and buyers begin to accumulate the stock.
• Stage 2 - Upon gaining control of price movement, buyers overwhelm sellers and a stock enters a period of higher highs and higher lows. A bull market begins and the path of least resistance is higher. Traders should aggressively trade the long side, taking advantage of any pullback or dips in the stock's price.
• Stage 3 - After a prolonged increase in share price the buyers now become exhausted and the sellers again move in. This period of consolidation and distribution produces neutral price action and precedes a decline in the stock's price.
• Stage 4 - When the lows of Stage 3 are breached a stock enters a decline as sellers overwhelm buyers. A pattern of lower highs and lower lows emerges as a stock enters into a bear market. A well-positioned trader would be aggressively trading the short side and taking advantage of the often quick declines in the stock's price. More times than not all of stage 2 gains are given back in a short period of time.

While these stages are historically defined over long time periods they actually exists in all time frames, allowing traders to take advantage of a cycle regardless of their trading time frame. Fortunately this phenomenon, known as a "fractal", exists within all security markets. A fractal is simply a rough geometric shape that can be subdivided into smaller parts that have the same properties; a smaller version of the whole.

This is important to understand because through technical analysis as we are often analyzing multiple time frames. In the short term, the four stage model may repeat itself many times. The combination of these short term cycles form a medium term cycle, and the combination of multiple medium term cycles form a long term cycle.

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Some Links for Your Weekend Reading

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• The Science of Success. Interesting article. (TheAtlantic)
• Is Technology Making You More (or Less) of a Jerk? (Harvard Business Review)
• Why Things Fail. From Tires to Helicopter Blades, Everything Breaks Eventually. (Wired)
• Removing Earwax Isn't Good For You, Experts Say. (WSJ Video)
• Life Expectancy for Less Educated Whites in U.S. is Shrinking. (NYTimes)

 

Trading Links:

• Walmart Reports Its Best Black Friday Ever With 5,000 Items Sold Per Second. (TheNextWeb)
• Does Black Friday Correlate With Upcoming Stock Market Performance. (Bigtrends)
• Fiscal Cliff: The What, Why, When, and How - All In One Place. (Learnist)
• Reality Check: Does High-Frequency Trading Hurt the Little Guy?  (QZ)
• Anonymous Deletes The Bank of Jerusalem’s Web Database. (BetaBeat)

The S&P 500 Index Just Broke a Long Term Up Trend - Do You Care?

Trading doesn't have to complex.

Sometimes simple indicators are better.  Trend lines are easy to follow and often meaningful.

Below is a weekly chart of the S&P 500 Index showing the recent break of an up-trend in place since 2009.  If price stays beneath this level, it will likely be tough for Bulls.

 

 

In addition to the trend line break, there is a negative divergence (where recent price highs happened with lower momentum).  Technicians often take this to be sign of weakness.

Let's see what happens.

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Some Links for Your Weekend Reading

You know the economy is tough when a company like Hostess Brands, the maker Twinkies and Wonder Bread, announces plans to close its plants and fire 18,000 employees as it moves to liquidate.

 

On eBay, the starting bid for a single Twinkie is now $5,000.

 

Here are some of the other posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• How the Secret Service Said Goodbye to Mitt Romney. (GQ)
• Get Smart People to Moonlight for Free By Turning Problems Into Contests. (QZ)
• The Next Generation Business. Data is the New Platform.  (GigaOM)
• Humans Can't Be Empathetic and Logical at the Same Time. (Popular Science)
• 25 Entrepreneurs Tell What They Wish They’d Known Before Founding Their First Startup. (DavidHauser)

 

Trading Links:

• QE3: 5 Things to Know. (AdvisorOne)
• Getting Less Bang for Fed Bucks. (Wall Street Journal)
• Why Wall Street Hates Obama. (Money)
• Veterans Say Economy Is Top Security Risk. (BusinessInsider)
• Stock Market Fragility Fast Approaching "Flash Crash" Levels Warns Bill Gross. (ZeroHedge)

100 Years of Income Tax - Infographic Shows How the Brackets Changed

Did you know the top tax bracket in the U.S. was once 94% ... ?

With 2013 marking the 100th anniversary of income tax as we know it, here isa look at what both the average Joe and the average CEO have been paying throughout the years.

 

Browse more data visualization.

 

So what’s in store for the future?

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