Fountain Head and Trend Following

I read yesterdays entry in Traderman Diaries and found it interesting. So I reproduce it here for my benefit--not yours! ( Reproducing his diary entry is so much better than writing myself. Ctrl C Ctrl V is so much easier than writing!)

6:00 pm Dear Diary! This Ayn Rand lady is so smart. She is scary smart. She wrote a book on the markets but managed to camouflage it as fiction! How many books, do you think, would a book on markets have sold specially in the 1940s? Thousands at best! How many do you think Fountain Head sold? 6.5m and counting, thats how many!

You don’t agree Diary? I will explain it. This book is all about Trend Following. Consider the characters:

Peter Keating: Starts off as a trend follower. He follows the recent trends in architecture. When the trend is towards tradition and history all his structures are historical and ornate. But the problem is that he does not believe in trend following completely and therefore when the trend changes to modern architecture he fails to actually follow the trend and ends a failure.

 

Howard Roark: He is the kind of trader who can only be long or only be short. You know that there are many like him in our market. His speciality is modern architecture and he prefers to practice only that. When the trend in the market is for historical structures he is a complete failure. Only when the market trend changes and modern architecture catches the fancy of the people he turns from a run-down failure to a success

Dominique Francon: The complete trend follower. When Peter Keating is successful, she marries him. When she finds Gail Wynand who is even more successful than Peter she leaves Peter to marry Gail. Finally when Gail is crushed by the strike and Howard Roark becomes successful, she quits Gail to marry Howard. She is my heroine and the principal character of the book I tell you.

Ellsworth Toohey: He has never built a single structure in his life but is considered some kind of expert in architecture whose advice is sought by many. He writes a newpaper column on architecture and can make or break many architects. I do not have to say who he keenly resembles! I am sure you would have guessed yourself. He is any trading expert you find on TV and newspapers. They never trade ever while making all their money out of advising clients.

I have lots more to say. But I have to go. Yes! Sonia has finally agreed for a dinner with me tonight after a lot of pleading. She did not want to meet me (not surprising ...in the first meeting I was nervous and not at my best) What finally clinched it, I think, is that I told her that not only have I read Fountain Head, I can also talk and discuss the book with her! I cannot wait to open her eyes to the implications of the book for any devoted market player! I am sure that this dinner will help me take this relationship to the next level.

11:00 pm What a night I am having. It was the best dinner date ever! I talked about Fountain Head and Trend Following. Sonia was left speechless with wonder. My deep insights must have totally floored her. I could see her eyes glaze and her mouth gape as she heard me expound even more about my insights on that book. I am sure that glaze in her eyes was dawning of respect and dare I say....love...for me! By the time I was finished, I could see her eyes shimmer with tears of gratitude for enlightening her with my ideas. Poor girl, she did not want me to see her in that state. So she made some silly excuse of remembering some appointment and rushed off. In her state of bliss, she did not even answer when she could meet me again. Dear Diary I have got it made with her! Next time I will read Atlas Shrugged and ask her out for dinner. That should completely seal it!

Dear Diary, after such a great day, I have to tell you that the last couple of days have again been bad for trading. I went long today when Nifty crossed 4875. What does the b*tch do then? It moves up to only 4885 and then drops down all the way to 4790... What do I have to do to get some luck going my way! Any way I will cut my long and go short now if the Nifty falls below 4787. But all these trading issues cannot get me down today! The dinner has made my day, no my year, no..no... my life!