The Modern Fable of the Wolf!!!

The S&P managed to close in the positive. The commodities rallied and surprise surprise the Dollar rallied too. The trend in commodities and equities is still up and the trend in the Dollar is still down. I am long the Nifty and will continue to be long until at least 4950 is broken. That is it regarding the markets. But I have still to write a note. So here is a very nice story that one should read.

We have all heard the story of the boy who cried Wolf. The story goes that the villagers came to the rescue of the boy twice and found that the boy was playing a prank on them. The third time the real Wolf came and we all know how the story ended.

This story can be turned on its head. The reality was that the Boy had not really played a prank the previous two times but had seen signs of the Wolf approaching. The villagers did not see the Wolf when they reached the spot and only thought that the Boy was playing a prank on them. They also did not like to be disturbed from the party that they were having and asked the Boy not to disturb them but join them and have a good time. The Boy was Smart with a Capital S. He decided to join the party but he danced close to the Exit. A couple of times he exited hastily when he thought the Wolf appeared only to rejoin the party when the Wolf did not make an appearance. The only thing he ensured was that he danced close to the Exit.

When the Wolf finally came the Boy was the first out. He had his cake and ate it too. A few villagers who had kept a close watch on the Boy managed to save themselves with a few injuries. The others met a sad fate. And the truth is that there were a few others who were permanently worried about the Wolf who did not join the party and were therefore saved from all the trouble but also never had any fun.

You can substitute the Boy with the smart Fund manager/strategist/analyst/trader-meaning you my reader:) and the Dollar Rally, spike in inflation, spike in unemployment etc for the Wolf and we have nice fable for the market.

And finally-like in Poker-if you do not know who the poor villagers are then....................