It’s all in the mind! Ever since childhood we are told that we can imagine a reality, that we can influence our lives through thought, that positive attitudes and negative thoughts can jump across into the physical world and impact on our existence. A great film memory for me was Donald Sutherland in Kelly’s Heroes proclaiming “No negative waves man, no negative waves!” Why I remember that I don’t know, but it simply had a positive impact, that to this day, brings a wry smile to my face.
So how much does our attitude, positive or negative, impact our lives? Personally, I think it’s the only thing that drives us, let’s be honest if you think you are going to fail then you almost certainly will. If on the other hand you go out there believing you can be king of the hill, you may just get crowned!
The world of money and “High Finance” is no different, for a start I just caused you to stop and think “High Finance, what’s that or who the heck does he think he is?” It’s all about perception, promotion, fact, fiction or fools! Superstition, rumour, guilt, greed, anger and a nice dose of psychological mumbo jumbo all combining to create a witches brew so thick, and at times confusing, that most of us don’t know if we are coming or going, buying or selling, Arthur or Martha.
In the stock markets a great example of this, whether you love them or hate them, are “chartists”. These are the guys who, with a zeal verging on that of the religious fanatic, log the price of stocks or markets, hoping for some divine intervention and sign! They whisper about double dips and breakthrough points, 200 day moving averages and worry about the lack of graph paper in the toilets.
So, do these “trends” really enable forecasting, or do the trends cause people to react to the actual trend itself and therefore create a “self fulfilling prophecy” in itself? Phew I’m dizzy!
Get enough chartists in a room and show them the same plotted line and they will talk themselves into a buying or selling frenzy, dependent on their star sign and current medication. Personally; well I believe in charts the reason being simple, if a great many people believe this stuff then their collective will and influence, over the actual traders, will cause a buy or a sell signal to go up and the price will therefore move.
Right now we are at an extremely interesting point on the World Markets, it’s almost a mega multi whammy, a major watershed or potential investment crevasse, if you will!
The Dow is trying to hold 10,000, the Nikkei is fondling 10,000 but is not convinced of her virtue. The FTSI has, dare I say it, penetrated 5000 and the DAX is dong the same, what a German tart! The S & P, an old hand and the cautious “old man” of the group, has breached 1000, but keeps on looking over her, sorry his, shoulder. Worst of all is the Aussie Bourse or Oz to me, its climbing all over 5000 but for ever going down!
Our own JSE ALSI has seemingly cleared 25,000 (it’s an African thing to be bigger than the other boys in this game) but keeps having the occasional slip up!
What does all that mean to us humans who have to mow the lawn, do the dishes and get the kids to school? Well quite simply it says that the whole market is driven by conjecture, superstition, fear and need! If all these important numbers are consolidated by the World Markets, we could be looking at another 10% upside before Christmas, if they don’t we could give up 10 – 20% of this years positive moves.
Me? Well I want them all to hold and for “us” Africans to be bigger than ever! After all in a few weeks I will hit my usual 365 day financial low, my wallet will be in free fall and the usual Christmas Bear Market will wipe me out.
So readers have a great Christmas and don’t forget to chant every night for the next few weeks, “No negative waves man, NO NEGATIVE WAVES,” while at the same time hiding your credit cards!