When You Least Expect It...Expect It

The market hasn't provided an opening for a nice buy the dip all year. It has been incessant and merciless to the uncommitted...

...and it has proven Al Funt's maxim "when you least expect it, expect it."

Market Avalanches by Jim Sogi

Great analogy

Avalanche prediction requires the study of the snowpack both historically and how the snow structure has metamorphosed over time. One of the prime causes of avalanches are weak layers and slab formation. Weak layers in the snow pack are layers in the snow that cause the snow on top of it to slide off it and down the hill causing an avalanche. Weak layers can be low density snow or an ice layer or hoar frost flakes. Slab avalanches are created when higher density snow bonds together then slides on a weak on steep hill. Avalanches can kill.
Avalanches remind me of markets. You can study market structure historically by looking at the number of trades at a price. Over time the density may change. Market order depth structure is not available in full but could be inferred to some degree. Some parties have access to full book.
The theory is there are weak layers in the market structure that might cause a market avalanche or rapid rise. There may also be dense layers in the market structure. An example is a long bar with big price change but low number if trades. Time may change the number of trades at the prices or depth of orders might affect the reactivity of the bar. And a gap is also an example of a weak layer.

Backfire

Taken from a SeekingAlpha article:

This phenomena is called 'backfire', and has been studied extensively by behavioral psychologists. The basic premise is that when confronted with facts that prove them wrong, opinionated individuals react very differently from the uninformed. Basically, instead of changing their minds and acknowledging the correct facts, they entrench themselves even deeper into their existing view.

Turn Off The Noise

Great advice from Charlie Munger:

"For decades I read almost all of The Wall Street Journal each day—and considerable portions of both The New York Times and The Los Angeles Times. I listened to the news on my ride to and from work, and at least a few times a week caught the national news on TV. By most common measures, I was clearly informed. But I was no wiser from it. All my wisdom came from my life experiences, my on-the-job observations, and the many books I started to read. Our job as investors is not merely to know what’s happening. We need to have appropriate context and perspective to understand the implications of what’s happening in order to make sensible choices."

Why The Market Pays Up for Growth

Great comment from Jason Cohen.

"The market rewards growth over profit ONLY WHEN the market also believes there's a lot more growth ahead of the company AND when the other mechanics in the company are sound, eg. good gross profit margin and high long term value: CAC. Once a company is large and simple market expansion isn't how it will grow, they're betting on the development of stronger business models. This is the current bet on FB, P & TWTR."

I had always intuited this and so liked when I saw it articulated. Not rocket science, but sometimes stating the obvious is good. 

Philosophy - Existentialism

Existentialism

- the fundamental difference between phenomenology and existentialism is whether the stress is placed upon existence or essence.

- existentialists accord precedence to existence.

Christian existentialists or neo-orthodox = Karl Barth, Paul Tillich, Rudolf Bultmann, Heinrich Emil Brunner, Rheinhold Niebuhr, Martin Buber

Soren Kierkegaard (1813-1855) - three stages of life   1.) aesthetic   2.) ethical   3.) religious

Aesthetic stage: hedonist in search of pleasure or an intellectual interested in abstract philosophical speculation.

The emptiness of ennui is an enigmatic inexplicable spiritual ailment which brings man to the abyss of nothingness, entirely discontent with his existence.

Genuine self-hood is not found in externals, but within, in passion, freedom, decision and commitment, that is, in subjectivity.

The chief distinguishing feature of the inwardness of the religious life is suffering and faith

existence precedes essence

Christ is the Absolute Paradox (God incarnate)

Kierkegaardian philosophy is fundamentally in direct antithesis to Hegelianism.

For the existential individual all is in the state of :Becoming.

Martin Heidegger (1889-     ) - dasein (being there, human Being)

- the basic mood of man is dread (anxiety), and the fundamental structure of man is care (concern).

- anxiety is caused by man’s encountering indefinable nothingness, evidence of his finitude

Jean-Paul Sartre (1905-    ) - dealt with dualism between subjective consciousness and objective Being

Man lacks Being because there is no God to create Being.

- man’s essence is freedom

“God is dead” therefore we must rely on ourselves alone.

- man is a useless passion vainly striving in a universe without purpose

Man seeks to become more than Being-for-itself, he also desires to be Being-in-itself.

- the fundamental project of man is determined by his desire to be God.

Philosophy - Neo-Scholasticism

Neo-Scholasticism, Neo-Thomism

- most contemporary Neo-Thomist philosophers are :Catholic

- constitutes one of the largest philosophical schools in the world (administered usually under Jesuit or Dominican orders)

Jacques Maritain (1882-    ) - existence without essence would be impossible.

Humanism secularizes by deifying man without admitting the necessity of God; it portrays evil as an imperfect stage which will be overcome in the evolutionary process.

Weltanschaaung - Christian worldview

Etienne Gilson - the revealed truths of the Christian bible agree with Greek rational thought

Christianity is an optimistic not pessimistic philosophy: instead of denying the existence of evil it sets out to regulate ,combat and destroy evil because the universe at its base is good not evil.