Sol Palha, Alan Lunt,
Wayne Krautkramer, John
Tyler, Ole Bear
& the late comer: Art Soukup
Round TableĒ contributors discuss
Mechanical Trading Systems: a ray of light or a cavern
December 15, 2004
Mechanical trading systems: a ray of light or a cavern of
There is a difference between
happiness and wisdom:
he that thinks himself the happiest man is really so;
but he that thinks himself the wisest is generally the
Francis Bacon 1561-1626,
British Philosopher, Essayist, Statesman
been lead to believe that mechanical systems and to some
point fundamental analysis are the necessary skills to
master in order to prevail in the markets. In an abstract
way fundamental analysis is nothing but mechanical system in
disguise; the data is put forth in a standard manner and so
anyone can decipher it with almost no effort. Mechanical
trading systems put forth a set of rules and all one has to
do is follow these rules; in essence all the players become
nothing but robots following a routine. The paradox theory
comes into effect now; it basically states that one will get
exactly the opposite of what one chases. We all know that at
any given time the masses must lose in order to be able to
feed the big players. Thatís why the 90/10 ratio has almost
seen no variation; 90% representing the percentage of losers
and 10% the percentage of winners.
I could go on
into great detail about why mechanical trading systems must
and will fail and in the process put almost everyone to
sleep. So in the interest of keeping you all awake I will
keep it short and sweet. Letís just pause for a second here
and investigate the name ďMechanical.Ē One of the
definitions by Merriamís Webster online dictionary is ďdone
as if by machine: seemingly uninfluenced by the mind or
key words here uninfluenced by the mind or emotions. First
of all the market is nothing but a composition of a million
minds so using a system thatís based on the rules set forth
by one manís mind and worse still devoid of any mental
influence is a recipe for disaster. Secondly the market
place is nothing but a sweat pool of emotions; lust, greed,
power, hate, fear etc swirling through the markets like a
hurricane descending on village of huts ready to decimate
everything in sight. The above definition of the word
mechanical is enough to make you want to run from any such
virtually impossible for a mechanical system to last
forever, since by design anything mechanical must and will
break down at some given point in time. Itís rather amusing
the terms we chose to represent the things we use or to
define what side of the markets we are on. Itís almost as if
we have nothing but a secret programmed desire to lose
syndrome ingrained deep with our psyches. Bullish and
bearish, we choose two of the most stupid, dumbest,
irrational and easily angered animals to represent
whether we think the market will go up and down. Then if we
happen to be individuals that favour just one sector we come
up with the term bugs as Internet bugs or gold bugs. Why
such a disgusting animal to represent ones position and
views. As we all know most humans react in an adverse way to
bugs, the first thought that springs to mind is to crush
examining the language we use in the market places
illustrates further psychological issues; scalp, plunge, up
thrust, perfect bottom, down thrust, flip, climactic sell
part of all this is that we pass nothing new to the next
generation. We simply reinforce these Neanderthal views, in
fact branding them into the next generations memory more
aptly describes the process. Is it any wonder then that we
keep repeating the previous generationís mistakes but do so
in a much more grandiose manner? Just look at the
speculative phase we have entered now (credit bubble, real
estate bubble and so on) it makes all the mistakes our
ancestors made pale in comparison. We leverage ourselves to
the our necks with debt to buy goods we donít need and use
money we donít have to pay for them; the real estate bubble
is one classic example of madness and history repeating
itself on a gigantic scale. Individuals take home equity
loans against the rising values of their homes and use this
to finance their extravagant lifestyles. Is there anything
more insane, taking credit to buy something more on
getting back to the topic at hand; no one is taught to look
at the markets as a game and study the mass mind and
behaviour of individuals and then learn how to use a few TA
tools that are open to subjective interpretation. By
subjective interpretation we are referring to the statement
that ďbeauty lies in the eye of the beholder.Ē Each
individual should see something different when using such an
indicator; this TA tool must never be allowed to become
standardized. If it is, the end is near. The ones that learn
to correctly master this tool will come out ahead, however
since the method is not available in a standardized format
this system could work almost indefinitely.
In the end
mechanical trading systems are reflective of our lifestyle
and the way we are as group of individuals; the 9-5 rat race
and the zombie like nation where everyone thinks and acts
like one. A mechanical system is also reflective of the fact
that most of us do not want to think, we want everything
handed down to us and when we get whacked on the head we cry
like babies. It is for this reason we never seem to learn
from history but only look for ways to perpetuate the same
mistakes on a flamboyant style. The only way to break from
this way of thinking is to actually attempt to start
thinking and using your mind. There is nothing wrong with
making a mistake because you might actually learn something
as a result of one; perpetuating someone elseís mistakes
provides no clues for improvement but only rules for
At the very
least some customization should be attempted so that the
system is adapted to ones own needs. It amazes me that the
easiest and most effective system in the world is not
studied or followed more widely. The system I am referring
to is trend analysis; all you do is spot a new trend
and stay on board till the trend ends. Trend analysis
involves the drawing of simple lines; it takes a little
practice but is worth its weight in platinum.
look at what type of system can and will work in the
markets. First of all one has to understand the difference
between contrarian investing and investing based on Mass
psychology. Contrarian investing is a very simple system as
it basically involves taking a position against the masses.
Mass psychology measures the frenzy periods or periods of
extreme hate or disgust towards a specific sector or
sectors, and then a position is taken during these extreme
times. Furthermore it measures the level of euphoria in the
camps of those that believe in the investment. In other
words it will measure how many of the so-called contrarians
are now extremely bullish and euphoric on a given sector. In
most cases when a contrarian takes a position in a specific
sector he is doing so as counter move to what the masses are
doing. However the majority of the contrarians are still
nervous and keep checking their positions rather frequently
to make sure that at the very least the bottom is in. Once
the sector starts to take off and produce returns they
actually lose this nervousness and become very bullish; in
other words they have now entered the euphoric phase. This
is where mass psychology kicks in. At this point it will be
time for the smart investor to bail out, you may not be
selling at the top but you will be pretty close to it.
understanding mass psychology is really an important and
integral part of a trading system.
to master several TA tools and make sure you do not use them
in a standardized manner.
need to understand be patient and disciplined. You have to
understand that sometimes you might have to wait for months
on end before you can take a position, however you could be
rewarded in weeks for your patience.
As irrigators lead water where
they want, as archers make their arrows straight,
as carpenters carve wood, the wise shape their minds
Buddha 568-488 BC, Founder of Buddhism
© 2004 Sol
systems, a ray of light or a cavern of darkness?
Any system is
good for the time in which it was developed. In the early
part of last century we had Dow theory, Elliot Wave and
Fibonacci. They still have a place but they need revising to
account for the new rule. The new rule is that money has no
set value, not like under the gold standard where money was
defined in terms of a base. Sure human emotion does follow
set patterns, and to some extent median averages can follow
those patterns. I am putting up a chart and you can put your
own interpretations to it using whatever system is your
favourite, there is only one interpretation I have. The Dow
has already crashed and burned.
In terms of
constant dollars based on 1990 the Dow hit a high of 7065.
It lost about half of itís value to hit 3669. Since then it
has broken out of itís down channel and is holding. In terms
of constant dollars the Dow is valued today at 1.7 times its
1990 value, hardly a bull market. I read as many
commentators as I can; many for them seek to find the
correct count or ratio, the correct historical model. But
until everything is based on a constant nothing will work
properly for them. That is the joy of a fiat system;
everything is hidden in plain view. When inflation, an
increase of the money supply, is factored in we can see the
evil of it. ďSmoke and mirrors.Ē
diatribe is about mechanical systems and do they work. I
have tested nearly every indicator man has developed, some
come close to perfect but are not to be relied on 100%. Mans
emotions come in floods, extreme swings of mood in short
periods, there are very few systems that can predict those
mood changes and technical analysis is about prediction not
history. My prediction is that the Fed will keep pumping the
money supply at the current rate of 56 billion a month
because M3 is dropping. Until money is lost to the system
there will be no effect on the market. The fear is not
© 2004 Alan Lunt
TRADING SYSTEMS! A BROKERíS BEST FRIEND!
A MECHANICAL TRADING SYSTEM?
trading systems are techniques that make trading decisions
for you! You input the trading data, and the system
generates a response that indicates the appropriate action.
You buy, sell, or do nothing depending upon the formulas the
system uses. The latest computer versions of these
mechanical systems are complete "black box" operations. Turn
the computer on, start the system, and it updates your data
base, and generates trading recommendations, and places your
orders directly to the brokers. Speed is of the essence in
these hectic times. Every
nanosecond counts when you
are trading using five minute charts.
MECHANICAL TRADING SYSTEMS WORK?
basic systems rely on moving averages. The more
"sophisticated" systems use combinations of moving averages
of both price and volume. The most "expensive" systems
incorporate stochastics, which are the mathematical
techniques for a non-linear science. These systems are
reactive by design. If a stock or a commodity acts in a
certain way, the system assumes that the stock or a
commodity will continue to act that way. It generates this
conclusion based on the formulas programmed into the system.
Some" Black Boxes" also compute a large array of indicators
in an attempt to increase "confidence" of an action
mechanical trading systems buy or sell "breakouts".
The stock market calls these traders "momentum players."
Their formulas assume a continuation of that movement.
Should that movement fail to continue, the system will
generate a loss, plus the commission cost. We must also
recognize that most mechanical trading systems always have
you invested in the market, either long or short! Their
primary assumption is that the movement that created the
breakout will continue. It therefore follows that you must
take each trade to increase the chance of profits.
trading systems also require trading in many markets. This
is an attempt to reduce total portfolio risk. Simultaneous
long and short positions in many markets can reduce total
risk, but it dramatically reduces profitability. The
ultimate hedge results in no change. Trend following is the
mission of mechanical trading systems. There have been many
attempts to accomplish this goal. Defining the trend is the
biggest hurdle. There is no universally accepted
definition of a trend.
Therefore, there is little agreement on how to follow the
CURVE FITTING or DATA MINING
is the technique used to
develop almost all mechanical trading systems.
of Agora Capital Services SA calls Curve Fitting a
"Curve fitting, or data mining, is the "art" of drawing
conclusions based on past information. When applied to an
investment scheme, or trading strategy, history shows that
(too) often such conclusions do not hold true once they are
implemented. The end result is an unpredictable performance,
often coming short of expectations. In peopleís minds, the
issue of curve fitting is mostly limited to systematic
traders such as commodity trading advisors- who are
perceived to build models by optimizing simulated past
performance based on given assumptions."
"This article argues that the trap of curve fitting occurs
across a wide spectrum of investment activities and that
most investors engage in curve fitting without know it"
RESULTS DO MECHANICAL TRADING SYSTEMS ACHIEVE?
first look at the daily charts for the last six months. This
will give us some insight as to the actual profitability of
momentum trading (acting on breakouts). We will use
Mar Soybeans as one example
for this discussion . We can assume that some mechanical
trading systems bought Beans at 596 or higher in August. We
may safely assume that these same systems sold Beans in
September, at anywhere from a small to a large loss.
Jan Crude Oil is our next
example. We may assume that some systems gave a
buy signal at $51 or better in Sept. They probably gave a
sell signal at break even, or at a loss in Oct.
Jan OJ is interesting. We
must assume that many systems gave a buy signal on 10/01. We
can assume a loss on this trade.
Dec Cotton is revealing.
Many systems bought at 48 or higher in August. Many
sold at 47 or lower in September. Furthermore, many systems
would have gone short at 47 or lower in September. This
trade would have been covered, and you would have gone long
at 47 or better in November. A look at the monthly
March Wheat chart is more
revealing. The latest CRB factbook discusses the much
heralded " breakout " to the upside after many years of
consolidation. A quick look at the monthly March wheat
contract ( Use March to March basis! Not nearest month
continuation charts!) reveals that the "breakout" was an
fake. You would have bought March Wheat at 334 or better
during July 2002. By April of 2003, March Wheat was selling
at 279 Ĺ. That is a loss of 54 Ĺ cents per contract, or
$2700 plus commissions per contract! Of course you were
using the margins recommended by your broker ($400 to $600),
so you were forced out of the market by the margin calls.
This assumes that you did not encounter "limit" moves,
which lock you in until the market actually trades!
Fortunately, other observers have described their
experiences. Therefore, we are not dependant on any one
personís experience or biases.
Bruce Babcock offers these
Mathematical analysis of commodity price data has shown that
these price changes are primarily random with a small trend
component. This scientific fact is extremely important to
those desiring to pursue commodity trading in a rational,
scientific manner. It means that any attempt to trade
short-term patterns and methods not based on trend are
doomed to failure. A good example of such a doomed method is
Japanese Candlestick patterns. This theoretical conclusion
is consistent with my previous research. Many years ago,
just as Candlesticks came into vogue, I attempted to create
a profitable trading system incorporating Candlesticks. I
tried many patterns and many types of systems, all without
success. I have never seen anyone else demonstrate the
effectiveness of Candlesticks using objective rules either.
Successful traders use a method that gives them a
statistical edge. This edge must come from the tendency of
commodity prices to trend. In the long term you can make
money only by trading in synch with these trends. Thus, when
prices are trending up, you should only buy. When prices are
trending down, you should only sell.
offers us this observation on breakouts:
If you believe Trend Following is simply buying or
selling a 20 day breakout, you are dead wrong. If you focus
on breakouts as a
Holy Grail, youíve missed the point and are
probably already on your way to losing your capital and,
ultimately, your shirt. A trader who focuses on market entry
only is in big trouble. Good trading is mostly money
management or risk management. Keep in mind though, once you
have the money management down, trading is 100% your
personal discipline and psychology. For a discussion for on
the effectiveness of STOP loss orders in money management,
see DO STOP LOSS ORDERS LIMIT RISK? ABSOLUTELY,
POSITIVELY, MAYBE! This article may be found at
claims that trend following is an illusion:
Although Niederhoffer peruses the National Enquirer for
insights into investor sentiment, he also uses less
provocative trading methods. Niederhoffer makes money by
finding small anomalies in the day-to-day ripples of markets
for everything from currencies to coffee. He uses a
statistical model to reveal how movement in one market might
influence another, such as sugar affecting the price of
soybeans. Most important, Niederhoffer is an inveterate
contrarian. He feeds off panic, making short-term bets when
prices get frothy. He condemns the common strategy of
trend-following, which helped make his buddy George Soros
super-rich. ''A delusion,'' he declares. Trying to read the
future in chart patterns doesn't work, either.
''Deception,'' he insists. And when forces outside the
natural order intervene in the markets, watch out. ''I think
of governments as if they're run by a professional criminal
class, taking from one set of pockets and putting into
another,'' he says.
The 53-year-old trader came by his unusual theories via a
blue-chip education: squash champ at Harvard, finance
doctorate at the University of Chicago, and an assistant
professorship at the University of California at Berkeley.
His transition to full-time trader is chronicled in a new
autobiography, The Education of a Speculator. ''By paying
attention to the little things, the nitty-gritty, the
humdrum things in life,'' he says, ''you become a great
Striker Trade Systems
was candid enough to share
released in 1994. It used the same rules to trade 23
different commodity markets. It was a very unique, dual
nature trading system. 99% of the current commodity trading
systems are Trend Following systems. There is absolutely
nothing wrong with that except for the fact that 70% of the
time markets are not trending. Instead, they are in a Choppy
mode. Trend following systems tend to get whipsawed to death
in these Choppy time periods.
Anthony W. Warren Ph.D
Trend-following methods typically utilize moving averages of
closing price data for buy and sell signals. Often, the
signals turn out to be false due to short-term market
fluctuations. Here, longtime STOCKS & COMMODITIES
contributor Anthony W. Warren, correcting one of the major
drawbacks of moving averages, introduces a trend-following
method that smoothes the data for trend identification and
measures short-term price fluctuations to establish
A final statement by
Victor Niederhoffer and Laurel Kenner
on trend following:
Rule No. 1, carved in stone for all technical analysts, is
that the trend is your friend. If ever there were a time
that we could, along with the Cabot Market Letter, report
the beauty of using a simple trend-following indicator that
makes it "virtually impossible to miss a major market move,"
this would surely be that time. No wonder that 830 aspiring
chart-readers, the most ever, registered for the Market
Technicians Associationís annual competency exams on April
26 in Jupiter Beach, Fla. Granted that some users of trend
following have achieved success. Doubtless their
intelligence and insights are quite superior to our own. But
itís at times like this, when everything seems to be coming
up roses for the trend followersí theories and reputations,
that itís worthwhile to step back and consider some
Is their central rule, "The trend is your friend," valid?
Might their reported results, good or bad, be best explained
as due to chance?
But first, a
warning: We do not believe in trend-following. We are not
members of the Market Technicians Association, or the
International Federation of Technical Analysts or the
TurtleTrader Trend Followers Hall of Fame. In fact, we are
on the enemies list of such organizations. Another
Bruce Babcock. He gives a general warning to
those individuals who are searching for winning trading
One of the few real secrets in commodity trading is that
most of what you read in books about how to trade does not
work in the real world. Even books by respected authors are
full of trading methods that lose money when put to the
test. You may find this shocking, but almost no commodity
authors demonstrate the effectiveness of the methods they
advocate. The best you can hope for are some well-chosen
examples or a few cursory tests.
Reports...Do the FT Rankings Constantly Change
Because the Systems Tested Are Curve-Fitted? -
Have you ever
tried to pass up a rope? I have spent the last two days
trying to analyze the Feb/March issue of Futures Truth. I
would like to share my conclusions with your readers to
start a discussion.
I know we are
all looking for the perfect system which works on all
commodities with similar rules and parameters, but are we
really looking for the impossible.
The very best
systems in Futures Truth were only good on a maximum of 4
commodities, and if you throw out such things as Pork
Bellies, Live Cattle, Soybeans and Eurodollars, then no
system was any good on more than three commodities. The best
systems all had three or less unrelated commodities at the
top of their lists. I thought that a good trend following
system would test well on all the Currencies because they
are very good trending markets. None of the systems tested
well on more than one currency.
worked well on any two commodities in the same group with
the possible exception of Gold and Copper. They both tested
very well under Welles Wilder's Volatility Movement System.
There was no
system that tested both T-Bonds and T-Notes, but they should
test similar on a system.
As I expected,
the few systems that tested well on the S&P 500 were very
poor on all other commodities. On non-trending markets like
the S&P 500, Wheat, Lumber, Silver, Gold, etc., there
probably is no perfect system to handle the random nature of
So what I am
trying to say is that there can never be only one perfect
system for all markets. You need one type of system for
trending markets; one type for random walk markets and one
type of system for commodities that trend for a few months
and then go into a trading range.
In all three
systems you would need an indicator like the ADX from
Wilder's Directional Movement to tell when to shift gears
from trending to trading range or to random markets when you
should stop trading for now.
surprise from my analysis is that pattern recognition
systems don't test well in related markets.
Pattern Probability System (PPS) tested well on the Jap Yen,
Lumber & T-Bonds - all totally unrelated markets. This
reminds me of something that Hulbert said about his one-year
ratings on stock market newsletters and their track record
10-years of tracking all the best timers, he finally
realized that his six month and one year rankings were
almost totally worthless. It seems last year's Guru is this
year's goat. There's no consistency from one year to next,
and you can't make money following last year's expert. This
leads to one last conclusion - Futures Truth rankings
continually change and I think this happens because all
these systems are curve-fitted. If you test any one system's
across 36 commodities and stock indexes, you should get the
traditional bell shaped curve results which means that 10%
or three commodities would test very good, and 10% would
test very poorly and the balance of 80% would fall in the
middle inside the bell curve. This might explain why only 3
or 4 commodities test well on any one system and why they
are totally unrelated. They probably found an algorithm and
then curve-fitted it until they got good results in 10% of
histories will never repeat the same way and systems are
doomed to fail. Look at an old Futures Truth and see how
many systems are still around, or even compare the "Top 10
since Release Date" with the "Top 10 for the past 12
Months". Only 4 out of 10 in the "Top 10 since Release" are
in the current list of "Top 10 for past 12 months."
made the following points about
while giving a speech at a Harvard
Business School Alumni Club Dinner:
"Of course, the underlying assumption is that history
repeats itself, that somehow by looking at past data, by
doing some work on the past information, by modeling a
market in that respect, you're going to be able to make
money in the future. Needless to say, that's an assumption
that hasn't fully proven itself in the real world.
Nevertheless, that's all that analysts and traders have to
go by. Unfortunately there's really not much new in the
mass-marketed trading software area. Most of the technical
indicators that are in software today are really rehashes of
technical indicators that have existed for many years, for
decades in fact, since the 70's at least, and early 80's."
"Examples are things like moving averages. While they are
very good at identifying trends, they by their very nature
tend to lag the market. Of course there's been a great
effort over the years by technical analysts in the futures
markets to try to tweak out the moving averages, to try to
reduce the lag in their response to the market. They've done
that with various efforts like weighted moving averages,
exponential moving averages."
"There's been a tremendous effort by technical analysts
trying to tweak out these various technical indicators that
have been used for decades. Even displaced moving averages,
which I find kind of interesting because basically it is
taking like a 5 day moving average and computing it's value
as of tonight's close and then just displacing it out, maybe
2 days or 4 days, into the future and making the assumption
that the value 4 days from today is going to always be what
today's value is". "It is an extremely primitive forecast
that's being made. But at least, I saw, there, an effort
towards forecasting rather than always looking at trend
following. We're at least beginning to start to look at some
form of trend anticipation, or being able to look at price
anticipation, looking forward rather than just backwards. I
felt, of course, that there had to be better solutions to
the problem than just using things like displaced moving
"And, of course, there are other limitations that exist in
technical analysis software today. The whole problem of
curve fitting with system testing, which you may or may not
be familiar with. Basically it relates to the fact that you
can take a trading system, whatever that system may be, it
could be as simple as a 5 day moving average crossing a 10
day moving average, and you're long when the short average
is above the long, and vice-versa. You might tweak out the
sizes of moving averages to optimize them to a specific
The CFTC has
declared war on fraudulent mechanical trading systems:
Futures Trading Commission Office of External Affairs (202)
418-5080 Three Lafayette Centre 1155 21st Street, NW
Washington, DC 20581
Release: 5023-04 For Release: December 2, 2004 U.S.
COMMODITY FUTURES TRADING COMMISSION CHARGES NORTH CAROLINA
RESIDENT ROGER OWEN AND HIS COMPANIES WITH DEFRAUDING
CUSTOMERS IN SALES OF A COMMODITY TRADING SYSTEM WASHINGTON,
D.C. Ė The U.S. Commodity Futures Trading Commission (CFTC)
announced today the filing of a complaint in the U.S.
District Court for the Middle District of North Carolina
against Roger Owen, Longhorn Financial Advisors, LLC
(Longhorn), Phoenix Financial Group (Phoenix), all of
Greensboro, North Carolina, and Daniel Belbeck of Nashville,
Tennessee, alleging that Owen, Longhorn, and Phoenix used
fraudulent advertising and promotional materials to solicit
customers to purchase their computerized commodity trading
system. According to the complaint, Owen and Longhorn, as
part of their estate planning services, and Phoenix
fraudulently solicited customers to purchase a computerized
trading system by falsely representing that their system had
generated huge customer profits. The complaint charges that,
in reality, no customer who purchased and used the commodity
trading system ever profited from its use. In addition, the
complaint alleges that customers who purchased the trading
system lost funds totaling more than $200,000 trading
futures, in addition to paying Longhorn and Phoenix an
aggregate $120,000 for the computer trading system. The
complaint further alleges that Longhorn and Phoenix held
themselves out to the public as commodity trading advisors
(CTAs) and should have been registered with the CFTC.
Similarly, the complaint alleges that both Owen and Belbeck,
the individuals who solicited customers, should have been
registered as associated persons of a CTA. Finally, the
complaint alleges that Longhorn and Phoenix failed to
provide disclosure documents to customers, as required by
CFTC regulations. In its continuing action, the CFTC seeks
full restitution and disgorgement, civil monetary penalties,
a permanent injunction, trading prohibitions, and such other
remedial ancillary relief as the court may deem appropriate.
The following CFTC Division of Enforcement staff members are
responsible for this case: Frank Rangoussis, Jan Folena, and
Richard Glaser. # # # Media Contacts Alan Sobba (202)
418-5080 Dennis Holden (202) 418-5088 Office of External
Affairs Staff Contact Richard Glaser Associate Director CFTC
Division of Enforcement (202) 418-5358 Related Documents
We are forced to stay with what
we "KNOW " to succeed in business. Thankfully, we do know
90 percent of all traders
5 percent of all traders make
5 percent of all traders make
all the money/
Markets are in a trading
range 70 to 85 percent of the time (called ON THE SIDE
prior to 1948).
Markets only trend 15 to 30
percent of the time.
The real profits from markets
come from trending markets.
Trend following systems are
wrong 60 to 80 percent of the time.
Mechanical trading systems
generate a lot of trades. (Most of these trades will
Trend following traders
experience "huge" equity drawdowns.
More trading generates bigger
Brokers prefer accounts that
generate big commission bills.
Only you can determine
whether a mechanical trading system is for you! After
all, itís your money!
FORGET THE DRAMA! TRADE WITH
THE TREND AND PROSPER!
Wayne N. Krautkramer
"Fortune Favors the Informed"
trading systems (MTSs) sound like a good idea: a winning
formula is incorporated into a set of rules or a piece of
software, and all you have to do is follow it to make money.
Thatís what the promoters would like us to believe: an
endless cascade of cash generated by their system.
this essay Iíll try to answer a few questions:
any, in my own experience, work?
Why many donít work
What is their role?
in my own experience, work ?
definite YES. Some are computer programs, and others
are knowledge and rule based like our own
Trading System. There is no such thing as a foolproof
system. A fool can find unique ways to misuse a system that
has taken decades to develop. Greed can make fools of us
I can only
speak with the authority of personal experience on The Nifty
50 System. It has been back tested to 1920, and Iím
currently working on a set of tutorials starting with the
Dow Industrials from 1900.In real time it has been
profitable since 1998, and each year owners of the system
are sent an update.
It is not
the Holy Grail however for a number of reasons-
MTMs that just use incorrect methodology or were optimized
for a market dominated by a certain characteristic e.g. high
volatility. This market characteristic then changes, so the
system no longer produces profits.
common reason is that the system just doesnít suit the
too many trades. Some generate 200 trades a week. Great for
the brokers and automatons, but not for humans.
not enough trades to occupy the trader. Traders like to
occupy themselves and think that the harder they work, the
more money theyíll make. In my experience, the majority of
traders will benefit from slowing down. This means waiting
longer before entering a trade, and once in, being prepared
to sit it out Ė at least as far as stocks are concerned.
Time should be our friend and not foe.
only be appropriate for certain markets and certain stocks.
I emphasize to our traders that in illiquid stocks, the
technical signals may not be accurate as they rely on
discipline and nerve to stay with a system. Many just donít
want to put in the time required to learn a system, and some
just find it difficult because of undeveloped computer
skills and atrophied mental capacity. These can be overcome,
new skills learnt and the brain sharpened again, but thatís
hard in a world of instant fix answers.
the role of an MTS?
traders, an MTS has no role whatsoever if they want an
instant fix and an effortless stream of riches. If such a
system were to exist, the market would soon discount it.
Nature abhors excess and deals with it in her own way, even
if it means destroying the user with their own success.
ideal for many however who are either starting out or lost
- An MTS
can be like a set of training wheels.
- It may
teach you to think in new ways.
system will be your mentor in uncharted territory.
- It may
teach you money management and portfolio rules.
- It may
even start bringing you profits that youíve never had
John Tyler CEO
Financial Sense Editorial Archive
Ole Bear, AKA Gale Bullock
I Believe in
absolutely amazed me that Mr. Greenspan has been able to
re-inflate the DOW Jones Averages including Transports,
Utilities, and the Industrials. He has failed, however, to
get the NASDAQ Bubble back over 5,000. Some magic wand Mr.
Greenspan has. Through the world of the repurchase
agreements, the Working Group on Financial Markets, and the
Big Boys diddling with the futures markets, ďall that money
on the sideĒ appears to have been put to good use in a Great
Secular Bear Market. Of course Bob Bernanke has been busy in
the back room printing all that money on the side they so
eloquently talk about on CNBC Bubble Vision, while that
McTeer at the Dallas FED urges folks to hold hands and buy a
brand spanking new SUV that eats gasoline. Greenspan says
real estate cannot be a markets bubble, because all real
estate markets are local. In a similar vein of Foolís Gold,
he urges folks to commit Hari Kari by taking out an ARM
mortgage loan so they can save all that money in a rising
interest rate environment. The great illusion is that the
Bull has been reborn. Some pundits have even had their head
handed back to them on a silver platter, much like John the
Baptist. We suspect most mechanical systems will work fairly
well in the short term and the short view, whether one is a
proponent of Elliot Wave, DOW Theory, or just plain
Technical Analysis. There is something in this market for
everyone. Google.com at $175.40 per share today, defies my
imagination and reason. Of course $300/share for
JDS Uniphase at the height of the NASDAQ Bubble seems
like a fairy tale when we are now in its LA LA LAND of $3
and change/share! This is what I call a chain saw massacre.
Beam of Light for Day, Pivot, and Swing Traders with
Google at $175.40/Share
Letís look at
the DOW Industrials containing 30 stocks:
been to the Abyss and done a hop scotch over it, apparently.
Whether one uses Wave Analysis, TA, Pivot Analysis, Dow
Theory, Martin Weiss Theory, our your own brand of market
and chart analysis that works for you, there is money to be
made in the above chart. Todayís FOMC at the FED gave us
another 25 basis points in the FED Funds Rate, now at 2.25%
and the mumbo jumbo from DA FED on the CNBC Bubble Vision is
all about ďBalanced Risks.Ē The truth in the above chart is
that there is no such thing as ďbalanced risk,Ē when family
money, and my money is on the line in this market with me as
the ďcaretakerĒ of the family cash. One is damned if they
do, and damned if they donít. The savvy trend is your friend
trader, using whatever mechanical trading system they use,
can still make money buying and selling stocksÖ if that is
all they are doing 8 AM to 5 PM. This is what I call baby
sitting the market and oneís money, investment capital, and
profits [in order to make money and avoid trading losses]. A
lot of my global markets guru friends are doing quite well
in the gambling casino with their mechanical systems, even
though they are smart enough to understand that a Great
Secular Bear Market exists for generally 10 to 12 years.
These guys earn my respect and admiration for having very
little fear. These rascals have the ability to stare at the
Black Bear in the Dark Cavern and reflect the light of the
Bearís eyes and teeth into their mechanical system. Thatís a
feat of magic in our view! That is NO FEAR, and in our view
the RED BADGE OF COURAGE! Ė should they get a little mauledÖ
Cavern of Darkness Ė Rogue Waves, Donít Buy Treasuries, and
everyone is too sanguine about this de facto competitive
devaluation by the US. To me, this is very serious, and a
very dangerous policy pursued by the US. I've never heard
any central bank telling the world not to buy their assets.
But this was essentially what Alan Greenspan said in his
Frankfurt speech on November 19. We are now talking about a
gradual sell-off in US Treasuries that would take yields
on 10-year notes to 5.0%. But if the world really were
convinced by Greenspan, why would bond yields stop at 5%?
Why should US equities be spared? Ė Stephen Li Jen from
Debating the Dollar
half a bird-brain knows that Greenspan told folks at his
speech November 19, 2004 in Frankfurt, Germany, not to buy
US Treasuries in a ďdaunting and measured balanced riskĒ
FED$PEAK-EASE to weaken the US Dollar. John Mauldinís
ďOutside the BoxĒ editorial
Debating the Dollar is a most interesting read,
and full of good stuff in this Cavern of Darkness. Thanks,
the all time high on the DOW Industrials? About 11,600 to
somewhere about 11,800, wudnít it? Heck, I donít remember,
as thatís Ancient Wall Street History Class 101! Letís
Assume 11,800, shall we? I measure currency destruction by
the FED and Bernankeís printing press in the so-called
inflation of real estate prices [novices and idiots call it
realty price appreciation Ė See:
Blitzkrieg Essay #5 Ė Ponzi and Electricity]. Letís
assume that realty in all markets of the USA appreciated
[currency destruction, or inflation] 10% per year since Year
2000. Thatís four years. 11,800 would coincide with the top
of the morning, and the top of the DOW. Assuming compound
interest like your typical banker [11,800 x 1.1 x 1.1 x 1.1
x 1.1 = 17,276], the DOW should be at 17,276 today. Sorry,
Charlie, It Ainít! OK! Assume your realty marketís not so
hot. Letís use 5% appreciation [measure of currency
destruction]! Doing new math [11,800 x 1.05 x 1.05 x 1.05 x
1.05 = 14,343]! Sorry, Charlie, It Ainít!
Gerome! Gee Whiz! I just love playing with a Hewlett Packard
12-C Financial Calculator! This is what I call the time
value of money, albeit paper. The point is, if the
mechanical systems huggers, are doing pretty short trades as
they baby sit their capital, profits, and money, they
probably are making some pocket change for the risk they are
taking. If their trades are not short term, effectively they
could be losing their long-term assets in their mechanical
system model Ė Time Value Money-Wise. Now, thatís a true
Cavern of Darkness with a lot of risk when DA FED actually
controls the Financial Markets, including real estate which
cannot be a markets bubble, since it is all local. Sir Alan,
give me a break, Pal. I ainít stupid, and, Nope! Ė I like my
Gonads and my Feet [shooting oneself in the foot, if you
miss and hit a more vital spot! Big Ouch!]. I will also
steer clear of an ARM mortgage just as I would avoid going
into a city infested with rats with fleas [hummm, the FED
could be infested?] carrying the Black Death!
See: Jim Puplavaís
Perfect Financial Storm Series
Realty Reality for our favorite fudge candy.
Call It a
Rap, Put the Moon to Bed, and Boogie On, Baby!
recognize the ability to play the casino on Wall Street.
Some Folks [Pundits] can make money buying and selling
stocks when these folksí only pre-occupation is baby-sitting
their capital, profits, losses, and the markets -- whether
they are reading tana leaves, tea leaves, used coffee
grounds, chicken entrails, or a mechanical trading system
that works for them. To be sure, there are profits to be
made, in coming inches to eyeball with the glint of light in
the Great Secular Black Bear in this Cavern of Darkness. I
applaud their courage, tenacity, bravery, and skill. They
have more Gonads than I, since the bulk of my portfolios
belong to folks over 75 years of age who can only tolerate
minimal risk. I wonít risk the Family Jewels on a trading
model given the circumstances of the Family Trust. But, it
can be done, if the trader can sell at the pre-ascribed set
trading loss to recover capital. Mechanical Systems to me
are like Baby Sitting 101, in our view, when I have another
job to do to take care of making my income. Besides, when
thereís a rigged DA FED controlled Gambling Casino, why bet
and play, and lose your capital?
I take a
more holistic approach to the markets for the portfolios I
manage. I recognize that at any time I wake up, any stock or
mutual fund [Eliot Spitzer, read me, Baby!], can get
hammered on the news, insider fraud, accounting
irregularities, or a financial melt-down. I understand the
destruction of the current money system [Federal Reserve
Notes] and the FEDís role in manipulating the heavy metals
markets, because I follow Midas Bill Murphy and
I believe in ownership of physical heavy metal as part of my
investment strategy. I believe that I cannot play options
with any degree of certainty because of the FED and its Wall
Street Shenanigans. What should go down does not, and they
snick my money. Playing the Bull, makes no sense in a Great
Secular Bear Market. Moving money off-shore to alternative
currencies in numbered accounts makes sense, in addition to
www.goldmoney.com. Being in a trading house money market
fund exposed to the GSEsí ability to use money market fund
intermediation is pointing the loaded .45 Colt at my Feet. I
prefer cash only US Treasuries [I can only lose how much
Bernanke prints!]. When one recognizes that the FED has
destroyed at least 95% of the purchasing power of the 1913
US Dollar, that the FED will do anything to perpetuate their
Ponzi Shell Game of Paper Funnie Monie and the Financial
Markets, this all is one big rigged Gambling Casino Crap
Game that I canít play in with short term trading
mechanisms, since I donít want to baby sit Family Money
every waking minute. I have a Life and a Future! Some would
say that I am just a Chicken. Perhaps, so.
Cluck, Cluck, Cluck!
www.mises.org. I direct yíall to Sean Corriganís
The Saga of John Law and Richard Cantillon. A most
interesting read. We would also direct to this scribe of Reg
Dťjŗ Vu: Central Banks at the Abyss, which was
fortuitously posted on 7 December 2004.
We view the
financial markets as a cavern of darkness, a deep dank black
hole that sucks in the believers cash for the long term
pivot play. In this black hole are a multiplicity of players
waiting to fleece the investor of their hard earned cash if
they donít carry a flashlight or lit candle to illuminate
their trading model. Given the real returns to Wall Street
gambling with the current destruction of the paper money
system, short term gains can be made, however, the long term
prospects of doubling oneís money are Foolís Gold in our
view. The best trading mechanism for pivot plays in the
financial markets will include several delta hedges that
include physical ownership of real money, aka gold and
silver bullion. The DOW at 14,000? The DOW at 17,000?
Possible, perhaps. But why take the risk in such a black
hole of Calcutta? Besides, I would rather believe in Santa
Claus than financial markets acting freely for my money.
Baby sitting, in our view is just too much work. Been there,
and done that getting all of my portfolios to safe
© 2004 Ole Bear
Realty Reality at
Aka, Gale Bullock
"In the land of the blind,
the one-eyed man is king."
systems - Are they a ray of light or a cavern of darkness
interesting question that the Contrarian Roundtable has
decided to address.
question is being asked in the context of an observation
written as " To many people have been fooled into following
a mechanical system or a newsletter that follows one, only
to lose their pants and their shirts."
question can be examined, in order to generate a correct
answer, it is necessary to address two other questions. Once
done, we are prepared to talk about light beams and dark
caves as the roundtable members polymorph into
quantum-mechanical physicists dressed up as spelunkers.
spelunkers because we are going into a dark cave. We are
quantum-mechanical physicists because we are carrying a
electric torch ( flashlight); which is a quantum mechanical
device. A long rope with lots of knots will get us into the
cave and then serve as our abacus to do calculations. If you
want to think of the rope with knots as your trusty
newsletter or your computerized trading software, that's
fine. Its a really good rope with plenty of knots for
everybody to hold on too and do the calcs. Chris Laird and
myself built it many moons ago, so we could proceed to "do
the cave thing on a vast range of subjects."
somebody is going to have to strap on a waistband that
carries "THE POUCH". Now at this point in time, because I am
the only guy at the Roundtable who knows what's in "THE
POUCH" I guess I should carry it; a grim task that I do not
second." says Sol Palha.
the motion." says Alan Lunt.
the question that got seconded?" says John Tyler.
Sol. "Grim task!! What's in THE POUCH?" and "Is this going
to hurt anyone?" says, Sol.
John. "'We want to know before we go! Harump.... Harump....
All this stuff about rays of light and dark caves with
stinky bat dung, pools or water that have fish with big
sharp teeth and of all things NO EYES, spiders running
everywhere, slippery rocks, holes with no bottoms,...almost
wish we never asked the dumb ...errr.. Brilliant question."
what about the poisonous snakes!! Don't forget the snakes,
Art. Be a heck of a way to go." says Alan. Alan silently
thinks to himself..."Hmmm...maybe the pouch is a med kit???"
Roundtable, to answer the TWO questions that were seconded
before they were asked:
No, I am
not going to tell you what is in "THE POUCH"; at least not
yet; and YES you are probably going to be hurt, but the
bright side is that the pain will probably only last
forever. Besides, Mary Puplava is standing at the top of the
cave doing what Mary does best; and as far as question go I
would like to say that there is no such thing as a dumb
question or a brilliant question. There are only dumb
says Sol and John and Alan in unison.
this Contrarian Roundtable you see; and of course praying.
"Oh yes. I
see. Hosting the roundtable. Thanks, Mary. Without your
wonderful support we would not be here" says All.
Sol, "What's Mary praying about?"
addition to holding onto the rope so we can climb out later,
she is praying "Please,please,please... Whatever happens
from this point on and until they all come back, please do
not let events unfold in a manner that will compel Art to
open the pouch to perform the grim task."
John Tyler. "Sounds like we are supposed to be more fearful
of the pouch than anything else in the cave...I mean bat
dung, blind fish, spiders and all."
course!" says Alan Lunt. "By being most fearful of what Art
has in the pouch, nothing in the cave can bother us, and we
can all do the quantum thing; find out why people are losing
their shirts as good quantum-mechanical physicists should."
Sol. "You have nothing to fear but fear itself; and Art's
got it in the pouch!
Rock and Roll. I got the flashli.... err TORCH, so I'll go
first. John, Alan, take shotgun along with the other
roundtable members, Art bring up the rear."
Contrarian Roundtable ropes down into the cavern of
darkness, I take the time to remind Mary that this is a good
time to start praying. In fact, it would be a real good time
for all the readers of this article to pray along with Mary.
We are going to need it.
Half Way Point.
party rests a bit half way down the cave, we find questions
scribbled on the wall. Sol does not turn on the torch as we
still have a little light from above.
Alan notice that all the readers have come along with us and
are murmuring and humming. Casting a glance at each other,
they say nothing. The readers are probably just reacting to
the first whiff of bat dung and assume they will adjust in a
moment. Alan thinks that he heard one of the readers whisper
"peas,peas,peas," but because of the strange way sound
echo's then muffles, he can't be sure. Besides, Art is
looking at the questions and explaining.
Question 1 - Is there any system that has ever been
Question 2 - Is there is such a thing as a "black box
Question 1 the answer is yes.
is a scissors, a closed mechanical cyclic system, which
always performs as long as the critical parameters of the
system remain within limits. The parameters are sharp blade
edges, un-broken pivot point, strong hand to provide the
energy for cyclic repeat. Snip,snip,snip goes the scissors
to the front-page of your newspaper. Look kids, a bunch of
paper dolls to dress up the Christmas tree.
Question 2 the answer is yes.
is a red-tipped paper "match", or as the Germans like to
say, a "lucifier.Ē Has-du-ein-lucifer-bitte?,,,
Do-you-have-a-match-please? A lucifer is an example of an
open non-cyclic "black box" mechanical system. An input of
friction to the red-tip, an brief output of fire and light,
a gentle wisp of smoke as a reminder of its past. Something
out with a red tip and ended up with a black tip. An input
to the black box system and an output from the black box
system. Trying to figure out what is inside the black-box
system is what research is all about.
So with two
examples we now know that "systems are effective" and "black
box systems exist". And more examples can be searched on the
net after we get out of the cave.
everyone rested and Q1 and Q2 answered the readers start
climbing back up the rope. They see that the way down is
getting darker, the passage is narrowing, and by now they
have heard something about a pouch, a fearful pouch, a pouch
full of fear, and the "peas,peas,peas" guy is insisting that
the Roundtable guys were talking about a "pouch potato."
Whatever the rumor was, a few decide to stay at the half way
resting area, and shout up to the top what they manage to
The Roundtable proceeds to the BOTTOM.
point voices and names all blend together and it is just a
stream of sound when anyone speaks. No one can tell who said
what, so we all agree to speak slowly with plenty of pause
time between sentences. Plenty of think time between
Bottom of Cave.
We are now
ready for the headline question........
"Mechanical systems - Are they a ray of light or a cavern of
it may be, the mechanical systems question has five answers.
answers you say!!!
second, that's impossible. I only see TWO choices in the
it comes to math, 1+1=2.
But the way
the question is stated, it allows for 5 events; because a
two choice "OR" question has 4 knowable events and 1
In order to
understand the 5 events, I will reduce and restate the
question; always keeping in mind that we are doing this in
order to find out why "To many people have been fooled into
following a mechanical system or a newsletter that follows
one, only to lose their pants and their shirts."
equals "A" "OR" "B".
equals "NO ray of light" or "cavern of BRIGHTNESS" <--FIRST
0 0 <--FIRST knowable event....reduced view.
equals "NO ray of light" or "cavern of darkness" <--Second
0 1 <--Second knowable event....reduced view.
equals "ray of light" or "cavern of BRIGHTNESS" <--Third
1 0 <--Third knowable event....reduced view.
equals "ray of light" or "cavern of darkness" <--Fourth
1 1 <--Fourth knowable event....reduced view.
equals Fifth non-knowable event.
x x ? <--Fifth NON-knowable event....reduced view.
x means we
do not care what the bit settings are.
? is the
The first 4
events are knowable and we will now name them.
Event 1 is
called OFF-Bright. The flashlight is off, but the cave is
glowing with light.
Event 2 is
called Cavern of Darkness. The flashlight is still off, and
we can not see anything.
Event 3 is
called Light-Bright. With a ray of light now present, the
cave is also glowing brightly.
Event 4 is
called Light-Dark. With a ray of light now present, but the
cave is now dark.
the Fourth knowable event is also an output that you can get
from the word "AND".
1 and 1
"ray of light" AND "cavern of darkness".
is turned on. We heard a "click."
assume that Sol turned on the torch, because he was carrying
it when we started into the cave.
hears a swishing sound and thinks it bats or something, but
I know it is just Sol busy waving the torch; wondering how
come he cannot see a light beam, and how come when he shines
it at what he knows to be a cave wall, there is no
thought, no one wants to admit that the torch is on but the
cave is dark (according to EVENT number 4) so everyone
pretends that the cave is bright (according to EVENT number
3); and it is so.
rope and knot calculator is really neat.
I can feel
the 0 or 0.
Yeah, And I
can feel the 0 or 1.
Me too, I
can feel the 1 or 0.
And I can
feel the 1 or 1.
On top of
that I KNOW that as I feel the 1 or 1, it is also a 1 AND 1.
for a moment, until it changes.
me a real big problem.
math says 1 OR 1 = 1, but 1 AND 1=2, but 1 only get 1 out,
so the AND is kind of like an ADD,
and the OR is
kind of like a what ???
that's it!! A merge.
getting creepy. Let's get out of here. Say, Art. your not
going to open the pouch are you?
yet. We still have event 5. Remember, How 1+1=5?
the NON-knowable event...
that's right. MECHSYS is x x? <--Fifth NON-knowable
event.... reduced view.
So how are
we going to know the non-knowable event?
What! But I
thought you said we could!
told you about 1+1=5 only after we were at the bottom of the
feel the rope again. Slide your hand along the rope. Feel
all of the EVENTS.
anything? As you slide your hand back and forth along you
will feel the "X" "X" and the question mark.
pass in total dark silence.
some one speaks.
"We have a
mechanical system inside of which, there are many
also have a black-box inside of which, there are many
Wow. "I can
feel it, but I can't know it."
1+1=5. You can feel, but not know, the Fifth EVENT.
minutes pass in silence.
everybody feel comfortable, tossed away your newsletters,
and so on?
gotten used to the logic pain and know that it is with you
complaints, I ask, "How would you now like to see an actual
XX?...!!! Is that possible?
are all well prepared; and up to now, I have seen no need to
open "THE POUCH."
see the Fifth event we must leave the cavern. I'll take
point, Sol has tail-light.
climbed out of the cavern, it seemed about a 100 times
faster than the climb down. It was all quite orderly of
course, no pushing or shoving, like we all had on some kind
of anti-gravity boots or something. As we past the half way
rest area and popped out of the cavern on to the grass, we
heard an echoing sound coming from a reader at the half-way
point. "The Roundtable just shot by us like a bat out of
hell. Let's get out of here."
Roundtable on the grass, completely safe, I noticed that
Mary was thrilled. Her prayers worked.
was still closed. Of course, the Pea mumbler wasn't sure if
he should quit, so with a funny smile on his face, he kept
quickly, before we lose our quantum-mechanical physicists
mindset, close your eyes. To see the Fifth event, you must
close your eyes and just listen. And then you will see.
went into the cave, I read this phrase on the web.
"Catastrophe requires multiple failures - single point
failures are not enough."
"Catastrophe requires multiple failures - single point
failures are not enough."
in mind, listen some more and paint the picture in your
it is the exact reverse. All catastrophes are ALWAYS caused
by a single point failure. And the specific "single point
failure" is always the one that was never considered. As a
group, single-point failures all have one common amazing
property, the ability to get around or bypass all built in
defenses in the system; and they all end with a common five
word lament...."We never thought of that."
Now see the
Fifth EVENT that is un-knowable.
one half million parts.
temperature coiefficient o-ring for Morton Thiokol booster
rockets part number x-xxx-xxx.
point failure occurs... a temperature inversion.
May the Challenger Astronauts rest in peace.
Do you see
it everybody? Do you see the Fifth EVENT?
quantum-mechanical spelunkers could speak, pea-mumbler yells
out, "I do."
temperature inversion." Horray! Horray!
say I. And what is the name of the Fifth EVENT?
Roundtable yells, "The name of the Fifth EVENT is "We never
thought of that."
reader chimes in "Yeah. It's even got five words in its name
is jumping up and down, shaking pea-mumbler by his shoulder
in pure joy, yelling "And that's why there are no dumb
questions or brilliant questions."
things that are, is, "DUMB ANSWERS." Horray! Horray!
everyone quiets down, Sol Pahla says, "O.K., Art. We get it.
1+1=5. So what's in "THE POUCH?"
what?...a butter...a butterfly net? There are no butterflies
down in that cavern of darkness that we just spelunked. You
mean all this time the fear in THE POUCH was a butterfly
of it as some kind of med kit."
Lunt is thrilled. He knew it all along. It was a med kit
chimes in with "Sol, let me explain. What Art is saying is
that while we were down in that deep dark cavern hole,
learning the other events and stuff, if any one of us as
quantum-mechanical physicists had said that we understand
quantum-physics,... well, Art would be forced to open THE
POUCH and gently slip the butterfly net over the person who
spoke. We would then proceed to safely get the insane
physicist out of the cave and hopefully into a rest home.
And he did not lie, for he truly carried the most fearful
med kit in all of human existence. What's neat is that we
all got back safe, and we still have our pants and shirts
on, and all of our marbles seem to be intact....maybe."
right say I.
of the o-ring in all of the newsletters, and computer calcs,
we are all just pounding sand with a yo-yo, waiting for a
K-Boom world wide.
"In the land of the blind, the one-eyed man is king."