A little knowledge can be a dangerous thing

This is an excerpt from one of the professors over at Minyanville, Jeffrey Cooper. This dude is very witty and one of the great trader's, who flies under the radar, in today's capital markets. This one of the deepest and most truthful pieces I've read. A similar concept is conveyed in The Alchemy of Finance by George Soros. Enjoy!

Is there any other way to trade other than technicals? Sure, buy and hope....hope that the information you're gleaning over and the numbers you're crunching are meaningful and the data points are real.

Don't confuse information with enlightenment any more than you would your position with your best interests. Don't confuse speculation with fundamentals because in the end, we're all speculating as to an outcome; some have a sharper edge than others. Some have a better hand than others, as in the marked deck that recent history has revealed and the ancient history of the stock market.

After all, following the great short campaign of 1929, is it any coincidence that the fox was put in charge of the hen house with Joe Kennedy becoming head of the SEC?

Quoting George Soros, "economic history is a never ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend, whose premise is false, ride that trend, and step off before it's discredited."

The Street and the public love a good story. P.T. Barnum said there's a sucker born every minute. There's two born every minute in financial markets.

Don't confuse long lasting trends with a truthful premise. Time doesn't make a falsehood any less of a lie.

Jay Leno once asked a young girl on his show what two animals signified the stock market. She replied, "the snake and the mouse".

Those that "control" the game have always been the snake and investors have been the mouse.

Unless you have large amounts of capital (translation - staying power) such as Paulson, who bet against the CDS market in the beginning of 2005 or Julian Roberston, who bet against the "new paradigm" in 1999, you must use technicals to weather the storm, no matter what you think you may "know".