SPECULATION – IT’S ALL THE SAME GAME, NO MATTER THE VENUE
It's all the same game. Yes, absolutely...100%. It doesn't matter if you're attempting to make money in the markets, betting football or playing poker...the contrarian angle wins. Not every single time, but a majority of the time you come out on top.
This recent Superbowl was a case in point. A few days ago, I wrote about how I thought the Green Bay Packers would end up winning the game and covering the point spread based on experience with the Google IPO. Yes, it's a strange connection to make. If you haven't read the article click here to understand.
All games of speculation, where there are vast sums of money involved, involve the 3 D's: deception, deciphering, and denial.
1. Deception - the masses, herd, fish, sheep...whatever you want to call them are constantly being manipulated into taking the wrong side of the trade. The bigger the venue, the bigger the manipulation. The more money at stake, the more slight of hand is involved. It doesn't matter if it's the markets in 1999 when everyone went all-in on technology or the Superbowl, where a majority of people thought that Vegas was handing them a gift with Pittsburg +3 points. Deception is as much a part of speculation as emotions, money and numbers.
2. Deciphering - all games of speculation require those who wish to prosper as a result of their efforts to be able to decipher the truth from the myth. Success comes with the ability to read into what the game is attempting to advertise or the diversion it is attempting to lay, and take the opposite side of the trade. It is similar to magic, where skillful magicians will divert your attention so well through repetition or slight of hand, that something could be going on right beneath your nose and you will fail to realize it.
3. Denial - never underestimate the power of human beings to live in denial. Generally speaking, people don't want the truth and prefer to live in their own dream. In speculation, this ends up being a lethal trait, as the market instinctively reinforces your false beliefs through momentary success or the illusion of success, only to render your efforts futile in the end. Denial is the reason gamblers (some who, by the way, are successful in all other aspects of life), whether in the form of stock market speculators, card players, or casino junkies end up throwing everything away over the long-run. Since these types of participants make up such a large part of the world of speculation, denial of the facts at hand makes up a large part of the speculative fuel behind the deception you observe.
You must look for the contrarian angle in every aspect of your speculative life. It doesn't mean blindly hopping on the short side against a huge uptrend or trying to buy into a stock that's on its way to a zero bid. It means intelligently deciphering what the market is telling you in a unique and potentially profitable manner. The market speaks to its vast audience every single day...all you have to do is be willing to listen.
