The inherent problem with charts

The inherent problem with charts is that a trend only lasts until it doesn’t. Thus, the only thing a chart can really tell you is whether the odds are favorable or unfavorable, not what the future will actually bring.

Twitter Is Collapsing

"Investors need to be aware that Twitter’s market price is driven by speculators not by investors who conduct fundamental research and apply sound valuation methodologies." Twitter Is Collapsing - Seeking Alpha via @salphatrending

Media needs eyeballs and ears to stay in business

The media needs to attract eyeballs and ears to stay in business. Hence, a “stocks tank” headline is always preferable to one that says “just another day of normal market fluctuations.” In the process of attempting to track readers, headline writers can fall victim to what is known as denominator blindness: The behavioral error of not considering the overall scale of a set of data. As an investor, it is critical to understand that a 100-point move now, when the Dow Jones industrial average is trading near 16,000, is less significant than it was when the Dow was trading at 10,000 (0.63% versus 1.0% percent).

Most declines don’t turn into bears

We realize that all bear markets start with a decline in stock prices. But most declines don’t turn into bear markets. Acting on the temptation to sell your stocks every time there is a dip in the market will drive up your commission costs and drive down your long-term net worth. More importantly, if you didn’t act to sell at the start of this month, ask yourself what makes you certain you’ll know exactly when to jump back in later this year?


Green Mountain Coffee Roasters (GMCR +1.9%) plans to get into the vitamin game with a new coffees, teas, and fruit drinks infused with vitamins. The new Wellness Brewed K-cup brand that debuts online today smacks of desperation to at least a few analysts (I, II) who are lighting up Twitter with sarcastic comments on GMCR management.


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