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December 11, 2005

Why traders have to focus on prices, Sun., Dec. 11, 2005, 1:59 PM

In 2H99, as the Great Bear Market was organizing, I pointed out in my market letter at the time that in a couple hours one day the personal wealth of Bill Gates grew by more than the annual GDP of Portugal. Now Portugal, as many of you know, is an enormous country.

Well, General Motors is an enormous company " 320,000 employees, 860,000 shareholders. And in just four days this week, Intel dropped in market cap more than one General Motors, which you missed because Wall Street had you looking in the wrong direction.

Wall Street profit bonuses to staff will aggregate $24 billion this year. They say it's because they have done such a wonderful job for you. Actually, the Dow 30 Industrials Average is lower today than its close Dec-31-04 (10,783). The average mutual fund and the average hedge fund has done squat for 2005 as the year comes to a close.

But they take their $24 billion in bonuses this year-end because Humungous Bank & Broker earned it " one client at a time. So when the market is flat, and they make enough to pay themselves $24 billion in bonuses, who lost, do you think?

I think the answer is obvious --- one client at a time.

And when the market in INTC took a $14 billion hit in four days this week, who do you think earned it? I'll tell you; it was the people who were running to CNBC to dazzle you with their stories.

And you were too busy to see what was going on right under your nose.


Note: I had to edit this article out of the Week in Review opening section this week because the MT Publishing software file size permission is exactly x bytes, and I went over that limit by this amount. That's ok, I do it every week while pounding out about 125 pages of "stuff," including 140 charts, that I don't have time to edit more precisely (or sometimes not at all).

Posted by Posted by Bill Cara on December 11, 2005 01:59:36 PM | Category: Trader Tools

Discourse

Bill,

Last week Intel announced spending multi-billions on semi manufacturing facilities in Israel while Israel announced that they are considering bombing Iran. Now just maybe that caused enough upset to some large regional interests with major market positions (who don't like the linkage) to say "sold to you!"

Posted by: TerryC [TypeKey Profile Page] at December 11, 2005 6:57 PM [link]