----- Original Message -----
From: Greg Simmons
To: '*G SIMMONS'
Sent: Tuesday, September 06, 2005 6:14 PM
Subject: Last of daily (old version) "Market Updates" Sep 6 2005
September 6 2005
The SPX closed up 15.37 @ 1233.39
The VIX closed down .64 @ 12.93
The "Position trading system" is in a BUY so today's move (which is hopefully the start of a move to new highs as people return to work finally in the U.S. equitymarkets) is welcome…
I will send "Position Updates" Intraday as to what is happening going forwardwith the BUY and SELL signals from the trading system, but have decided to stop the daily "Market Updates".
The reasons for the discontinuation of the daily "Market Updates" are listed below:
1. from the late 80s when I started in the business I have seen more harm than good come from owning single stocks i.e. my 1st day on the job I was told by all the senior people/analysts etc. to just put all my people in IBM and hang on for the long term… if I had taken that advise my "people/clients" wouldn’t have seen a breakeven return on their money for >10 years! Think about the compounded return on bonds during that period !!! Also you have to remember the WorldCom's, Enron's, and other Multi-Billion
Dollars nightmares that have unfolded before my eyes… for crying outloud people are still sitting around holding Microsoft and Cisco waiting for them to someday make money again.
2. due to the above I have always had a "Bearish" tilt and have felt that equities were a waste of time (figuratively and literally) plus on a risk and inflation adjusted basis a bad bet, however, even when I would make a perfect "Bearish" call i.e. in Barron's at the top of the market in August 2000 (see attached) people want to kill the messenger regardless… I did receive a nice letter the other day from someone thanking me for the Fannie Mae information back in January because he sold the stock and saved 20 points, but the "thanks you's" are far and few between - - nobody wants bad news and it exhausting reading about it, writing about it, and sending it.
3. my sending out fundamental information regards the risks of the downside does not make sense to me anymore. The data is, in this day and age, ignored by the markets i.e. the New Orleans nightmare, the terrorist bombings in London, 911, not to mention War, Oil prices, real estate bubbles, the debt bubble, Greenspan's money printing games etc. I still feel that someday these problems will cause the 2nd leg of the "Bear market" to surface and create massive losses, but here we are today with the market looking good based on "price action" and I am in a BUY signal so why bother? Due keep in mind inasmuch as the market didn’t go down on any on the horrible new of the last few years (I think it's just the flood of money poured into the system by Greenspan) the market is about deadeven over the last 4 years and is down over the last 5 years, so if you missed the Homebuilders, Goggle, Kmart, and a few Oil stocks you pretty much missed the party.
4. with my entire focus shifting to purely mathematical "system trading" and away from selling option premiums on the SPX index it has really become glaring the it has been RAINING MONEY and it has simply been the equity markets that are under an umbrella for the last few years - - check the prices of NATURAL GAS, OIL, GOLD, COCO, LUMBER, ALMONDS plus many other vehicles over the last few years they have made the returns on the previous NASDAQ bull run seem very pale in comparison!!!
I will start a new weekly "Market Update" going over a broader scope of vehicles that actually move starting this Sunday.