Traderman Goes Deep

I happened to read Traderman's recent diary jottings and was totally blown. I had always thought of Traderman as a pretty shallow individual mired in trading and nothing else. His jottings on Trend following and Fountain Head were truly indicative of a myopic world view. But something has happened. He has started reading stuff and that is reflected in his writing as well. This is what he wrote yesterday.

" Dear Diary, We are all aware of the problems facing our world. There is no need for me to elaborate on them nor is there a need to give reasons for why asset prices across the world are falling. That they have been falling is accepted and all that is left for each one of us to do is to reflect and decide how to react to what has happened till now.

This is important to understand. We are not reacting to what will happen in the future. We do not know what can happen. We are not reacting to what is happening now. We are reacting to what has already happened. At the same time, is it not true that we cannot react to what has happened unless we have beliefs about what can happen in the future given what has happened in the recent past. Some people, like trend followers will believe that if the recent past was a fall then the future is likely to be a downtrend too. Value worshippers will love a fall as an opportunity to buy. Even people who believe in mean reversion will do the same. So the past has no meaning unless we attach our beliefs to it and react to that.

Therefore is not logical to infer that all action is not based on data or the past (because each individual reacts to same data/past differently) but based on our own belief systems. So is not logical to suggest that we act according to our beliefs. Therefore is it not correct to suggest that this market and the current price is nothing else but a sum total of our individual beliefs? Now that I know this Dear Diary, I am going to not worry about anything. I know that I am trading my beliefs and will continue to do so without worrying about what I hear from others in the market!"                     

This Traderman seems to be off his rockers! First he reads Ayn Rand and now he must have read some book by Osho who knows. This diary entry of Traderman is unlike he has ever written before!

Coming back to my own situation here, I am short the Nifty and will cut my short positions and go long if and only if the Nifty trades above 4849. Finally just as a parting gift from me to you, I attach the chart of Gold one of the few assets to have done well this year! Please take a look.