Animals in a
laboratory sometimes curl up in a ball and may deny all stimuli
when
events take them by total surprise. Freud said, people sometimes are
in
a state where they know what to do but they cannot act. They are more
likely
to freeze when encountering an overwhelming threat. It's basic biology.
Immobility
slows their heart rate and lets them regain composure and start to
cope.
In some situations, this works well. In the wild, a lion, tiger or a bear
is
usually impelled to chase down and eat that which flees. But in the stock market,
doing
nothing can be be very costly if a bear market is starting.
In therapy, making such
people aware of the reality they face, the bases of their
irrational
beliefs and the consequences of acting or not acting in accordance
with
reality are essential first steps. Sadly for investors, a therapist has plenty
of
time, sometimes years, to:
(1)
probe the patient's psyche for the bases of their irrational belief structures;
(2)
repeat over and over what the pertinent reality is; and
(3)
show what the consequences will be of living in denial and not
changing
a self-destructive behavior.
The stock market is not so kind. It
will not wait for a therapeutic break through.
=========================================================
Light Bulb Humor
Q: How many Psychiatrists does it take to change a light bulb?
A: Only one, but the bulb has got to really WANT to change.
A': None; the bulb will change itself when it is ready.
=========================================================
Therapists
do make break-through with people who have stubbornly refused to
change
their behavior. They do this by clearly predicting what will happen
to
the patient if he or she does not change. When enough of the therapist's
warnings
(predictions) come true, the patient may finally accept reality |
and
make the necessary changes, provided they do not have too much emotional
stake
in their make-believe world.
We hope the way our predictions have a way of coming true, will help you.
Get Peerless. It is the cheapest
market insurance you'll ever buy.
An Example of A Neurotic Denial: Homebuilders
For a long time, the home builders acted like deers in the headlights. They
saw
sales slow, but kept churning out homes. And even when they started
cutting
production, they kept staffing levels up under the assumption that any
dip
in home demand would be short-lived. Finally, some have cut staff,
production
and prices. The median price of a house fell by 10.9% last month
compared
to a year earlier. This was the biggest drop in the more than the
35
years that such data has been kept.
Financial Stocks - The Canary in The Mine
Will
the Fed bale out brokerage stocks as they did in 1987 and 1998? 
Housing and sub-prime defaults and bankruptcies may be just the beginning.
8/3/2007
Bear Stearns is in big trouble. http://online.wsj.com/article/SB118615761924887472.html
"When
have financial stocks ever been so over-leveraged?
(Jim
Rogers, CNBC 8/7/2007) Is a
crash a "done
deal?"
Bear Stears
- BSC is collapsing, way ahead of the rest of the market. Why?
How Many Predictions Must We Make That Come True,
before You Will Buy Our Peerless Stock Market
Timing?
When the stock market falls like it has since our July 17th major sell, most investors
covered their
eyes and refused to even listen for an
alarm, much less assist in the lowering of life boats. Our site has
posted numerous public warnings
since June. We are normally very bullish. But
the signs of big trouble
began to be too obvious to ignore and not
pass on.
June 18, 2007 - Global
Boom or Bubble?
June 19, 2007 - Big Declines in Years Ending in "7".
"Going back 120 years, the average DJI-30 decline
at some point in a year ending in '7' is 23%!"
June 22, 2007 - Summer Rally?
"There is a 68% probability of at least a
10% correction
by the end of October this year.. A top in July is the most
likely scenario."
June 28, 2007 - What Will Housing Stocks Do in A
Weak Market? They Are Collapsing in A Bull
Market.
July 2, 2007 - Where
Are The US High Tech Jobs Going?
July 12, 2007 - US
Dollar's Decline Is Getting Serious
July 17, 2007 - Peerless Major Sell
Warns of Impending Correction (if we are lucky)
or bear market.
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