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“Why Greece’s Lenders Need to Suffer”

A recent interchange with [prominent trader appearing on my podcast]:

Name: Read: “Why Greece’s Lenders Need to Suffer”

Covel: Great ending paragraph:

“There is an unsentimental logic to markets. If you make a bad investment, you are supposed to pay the full price — because if you don’t pay the full price, you will keep making bad investments. The only way to get the bond market back to its historic role is to make bondholders feel real fear that they might lose money if they make bad decisions. We need the market to reward bets that are economically wise, instead of those that are politically savvy.”

Wonder if we ever get there….

Name: We will get back there because our government will run out of money like the Greeks’ government. Ours will be painful too.

Warren Buffett Reaps $10 Billion From Crisis-Era Investments

A comment from Warren Buffett:

“In terms of simple profitability, an average investor could have done just as well investing in the stock market if they bought during the panic period. You make your best buys when people are overwhelmingly fearful.

Without bailouts Buffett’s firm doesn’t survive.

Bailout Nation Started in 1998 with Long Term Capital Management

Bailout nation started in 1998 with the bailout of Long Term Capital Management (LTCM). Here was their annual report (PDF) that made them the darling of the investing world back in the day. Why bring it up today? LTCM is arguably at the root of current 2012 chaos. The first cut so to speak.

Shout to Barry Ritholtz for the title borrow!

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