Total confusion. Indicators galore. Nobody knows nothing.

Posted on Sep 03, 2011 by in Letters

Barron's is touting longs.  Joe Schmoo is getting short.  Dow Theory guys are buying.  Short interest is at historic high.  (A word about "negative" indicators here.  Some bulls take huge short interest as a contrarian signal that the crowd has to be wrong and so big short interest means a bull run is about to start.  Of course there is always that 10% of the time when the crowd does turn out to be right and you get your head torn off for fading it.)  The din of competing opinions is cacophonous.  Fortunately we observe these opinions (because that is what they are) and throw them in the trash.

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