[TrendSailorâs Response Part II]
But to ease a moral conscience we note that no one has a perfect God's eye vision to know the context of the other trader on the other side of the deal. Morally we can opportunistically and honestly point at our human limitation to find an easy excuse to remove morality from trading. After all who are we to play God and sinfully presume perfect knowledge? Yeah, maybe then we should not play in things we canât understand and remove all chance for harm? But if my brother profits from my mistake is that charity and is that good? From this circular path of reasoning we risk the same insanity we see coming from portions of the middle east among those with bent & twisted theological view.
As much as some try to find victims in every encounter (liberal thinking) itâs just impossible to know who the victim or loser is in the market; at least on a personal basis. Often times we ourselves are the âvictimsâ if such a word has relevance. Are we the âvictimâ or really a fool if we knew the risks and our own limitations (and imperfections) and tempted fortune? Vanity has its price. What may however be a moral issue is actually heavily betting against your neighbor in a way that one seeks to profit by his misfortune. Some of us DO have a transitory problem with betting on gold for example and hoping the currency will crash to the severe ruin of the majority. No doubt here however, in that scenario lead (as in bullets) trumps gold and the concept of ownership can change at the whim of your greater numbered neighbors.
Who "wins" in that deal and scenario? Will that gold buy a good burial or a better after life? Religion is in here after all it seems and this ultimately is a religious war (and question).
But I widely digress on the moral aspects of this question and only wanted to provoke thinking and to consider if there is a hidden agenda here as well. There are consequences to all things â some moral and some permanent. Again, the core non-political and fundamental general issue is
'can you make money in a massively down marketâ ? The answer of course is yes - just as much as you can profit in an up market. This is all assuming a limited warring conflict where the markets are not closed or disrupted by war. Clearly in that opposite case (e.g. attack on trade centers, electronic failure, etc.) war would be universally bad since it would prevent physical trading and deny access to oneâs âwealthâ. But from the theological perspective of Iran this would be âgoodâ (for them and us). Thus the core conflict is seen to be a profound and utterly orthogonal perspective on the very semantic of âgoodâ and âevilâ. Both canât be right and one or both must yield (but compromise is as evil as capitulation for both) or both must die if they can not be segregated. Note also the logical possibility that both could be wrong as well. But these realities are too sobering for most to face head on so we unconsciously chose pacification through indecision and ignore the conflict and essentially chose through inaction to accept the consequence that indifference leads us to.
The issue here is how much does one bet/hedge for the one large low sigma down event given the foreseeable prospects? This comes down to personal style. Some play for one big home run. Others play for a lot of smaller singles and doubles. I'd personally not focus on the Iran thing as a single issue or opportunity or concern. The money is to be made on the prevailing trends and changing ripples in the market as world events naturally unfold. Ride the waves (both ups and downs) and have a stake in various opportunities. Nothing is worse than not being in the market when there is opportunity or being on the wrong side of it when a trend changes suddenly. Sometimes if one is smart one can even make a ton of money when there are no trends or any market motion by selling time (e.g. credit spread options).
As for me I do it all. But to further remark I have to take the bait of the original question and expose
some[\i] of my own personal sentiment on the underlying geopolitical situation. I expect the Iranians to succeed in doing the thing they really want - increase volatility and anxiety to drive oil prices higher to their own (short term) economic benefit. But high risk-reward large bets eventually self destruct and go bust. I could frankly care less if they blow themselves to hell and want to call hell âparadiseâ. There are never any guarantees in life and THAT is why we have markets â to mitigate risk and balance needs. But everyone suffers when complete societies go bust and we are extorted form our own self interest to pick up the peaces or pay up front to help them get on their feet (and also further their global objectives which are contrary to us). In the old days they called this simply an âenemyâ. However note that from an Iranian's perspective they are "bad" for the US stock market and therefore they are "good" in the context of their own identity struggle and their own fabricated belief system. I personally could care less what labels are put on the behavior (even when itâs certifiably childish). Financially speaking I am personally inclined to sell them short and hope they go straight to hell (their paradise?) and get what they deserve financially, socially and otherwise. Hell whether real or invented is nothing more than a huge perpetual penalty box that segregates and isolates the miscreants from the normal souls. The higher they raise the stakes and threaten the peace the more they isolate themselves from the rest of the globe and the closer they move toward a self elected hell. I certainly will have no moral difficulty or dilemma in profiting by the downfall of a committed enemy. And if its hell they want I might even push from behind and help further their cause in that direction. In all honesty though everyone, including Iranians, could profit more if they just grew up and started cooperating with the rest of humanity. But its not about just moneyâ¦
But to finally answer your question - going to war with Iran will be "bad" for some and "good" for others. There is nothing new or special or different here. This is the nature of markets. Some win and some lose. If high volume is seen as good then yes it is definitely good to go to war with Iran sine that volatility and churn will results in massive re shifting and trading volume. Some might even call it healthy and necessary for efficiency. But for those irrationally and theologically inclined (or intellectually befuddled) to think of âbadâ as "good" it kind of clouds the whole question. By the way, has anyone ever figure out what they are going do in paradise when all the virgins are spoiled before they are half way through eternity? My concern here is that this system of belief will in practice tend toward incestuous paradisial behavior. And that could very well lead to another round of the Divineâs discovery of various inequities among the newly admitted âenlightenedâ ones (note: Judaism and Christianity predated Islam by 1000âs of years and 600 years respectively). That would certainly result in the expulsions of the newcomers from paradise. This would of course lead to another theological struggle between heaven and earth and re-start the whole good vs. evil thing up again with a different devil. Nothing like setting all of Creation back and resetting humanity to try it all over again. I wish God would just come down and tell everyone to get along or he is going to send everyone to hell. Wait â if we can believe the Christians accounts I think he did that already with his message about loving each other.
In closing I note that the only thing that changes in war are the stakes and the currency involved. But I don't think a pound of flesh is fungible with oil nor does it lend itself to efficient markets. Perhaps if itâs guaranteed to be someone else's flesh Iâd be less particular on this latter point.
TS
I will not ask who you are...being this a public anonymous internet board...but your complete and succint commentary on the high points is much appreciated. Someday I will be able to formulate my own commentary like this, but I am merely a student in the markets and a retail living room trader for now. I am reading a lot and trying to remember at my brains age of 47 years.