BarroMetrics Views: A Reply to Amit J Gupta

I received the comment below from  Amit J Gupta that I felt needed my reply.

Here’s the comment:

“If non-serious/part-time traders are removed from the market, simply because, as per Dr. Dorn, the ramifications of their lust for fast money could be permanently damaging, who are serious traders going to sell their holdings to when time comes to exit the market?

And if the non-serious traders are absent from the market, will exit/entry signals ever come? Momentum weakens near the tops/bottoms only because fast traders have done their buying/selling, and the game has shifted into the hands of the smaller basement level traders, who try their best to move the market higher, but lack both the conviction and the monetary fire power.

That’s when we see divergences occurring in the markets, which smart traders ruthlessly take full advantage of. It really does not matter how many alarm bells are raised, a certain section of the human species will always unconsciously present/sacrifice its head for the betterment of the rest of the group.

A stock market is just like any other society populated by humans. The rules of existence apply to it to the maximum - for the fittest to survive, the weaks must perish. In this game, the weak hands play an equally crucial part in the nature\’s larger design. So, the importance of their participation in this game cannot and must not beunderestimated.”

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Hi Amit

Thanks for the comment. I want to be sure I understand it correctly. If I do, then there is no further need for you to reply. The philosophical gulf between us is so large as to be unbridgeable and I don’t want to engage in useless debate. We are unlikely to change our minds - best to agree to disagree. On the other hand, if I have misunderstood you, I’d be happy to hear from you.

When you say:”If non-serious/part-time traders are removed from the market, simply because, as per Dr. Dorn, the ramifications of their lust for fast money ….” I assume you mean, Janice should stop seeking to educate the ‘non-serious/part-time traders’ because they serve a worthwhile function - as fodder for the profits of the professionals. This role is in ‘the public interest’: given human nature, someone must fill it.

The implication of your comment is the ’non-serious/part-time traders’  ought to be allowed to boil in the stew of their own making. If we succeed in educating all the newbies, then the professionals will no longer have a pool of losers from whom to make money. Do I read you correctly?

If so, wow!

My answer:

I have a few questions:

  • Should a professional not lend a helping hand simply because it may mean less profits or no profits?
  • No doubt some newbies (’non-serious/part-time traders’ ), probably many, will spurn the assistance in the pursuit of their goals but is that reason enough not to assist?
  • And since most professionals begin as newbies, who will decide the questions: to whom should help be given? From whom should help be withdrawn?

Anytime someone speaks to me about ‘doing something for the good of society’, or  ‘in the public interest’ etc, I bolt for the door. It usually means someone has decided he will be the spokesman for ‘the public interest’ and is about to place his hand in my pocket. In this case, I must admit, the hand is not in my pocket, but in the pocket of any potential newbie aspiring to become successful.

In my view, there is never a justification to forcibly sacrifice an individual’s interest to that of society’s. In any event, there is no such thing as ’society’s interests’; it’s just some spokesman claiming that title for some group of individuals. Even if there were such a thing as society’s interests, it would not be entitled to ride roughshod over the rights of the individuals. Individuals band together for mutual benefit which they deliver or they disband. The only constraint on the individual is he will not engage in force, fraud or coercion.

It is no fluke of nature that the greatest advancements in history have been made when individuals were freest and that came about when the principles in the preceding paragraph were applied.

To deny any individual the right to achieve his full potential is morally wrong. He may not want to be educated, he may want to harbour delusions of success, he may undoubtedly seek his own ruin by ignoring reality - but that is very different from saying he ought to be deprived of  the possibility of change.

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