Market whiners, fall colours and philosophy

I've been spending a lot of time over the last year trying to learn how to make money in the stock market. And I have to say I've done pretty well. I was doing even better until last Friday. Contrary to what the media would have you believe, the world was not about to end last week. Some of us were playing by the rules and doing just fine. Then the US government changed the rules completely. Which has lead to some whining. But not from me because I think I have learned the single most important rule that every investor or trader should memorize. "Know how much you can lose before you open the position". If everybody did that then one of two things would happen:

• they would make money because the stock did what they expected it to do
• they would lose the money that they had determined ahead of time they could afford to lose

Its really that simple. Position size has to be related to what you can afford to lose. If everyone invested that way there would likely still be a lot of whining but there would be no rational reason for anyone to whine. There were lots of us last week who were short the market and who had been short it for a long time. We were making money - sometimes a lot of money. A lot of people were whining but some of us were quietly making money. Then the US gummit stepped in and changed the rules, effectively saying "if you're big enough and in a bad enough mess then you can't go broke". You know the old saying "If you owe the bank $1 million and can't pay then you have a problem. If you owe the bank $100 million and can't pay then the bank has a problem." To that you can apparently now add "If you owe $100 billion and can't pay then the whole world has a problem." I'm not wild about that philosophy and I've got a lot of company in that sentiment but it ultimately doesn't matter. I knew what I could afford to lose going in. I know how to manage the eventual loss and my capital will be intact to trade another day. Its too bad everyone didn't have that attitude because if they did we wouldn't need massive governmental interference in the markets at immense public expense.

Today we moved from Saskatoon to Prince Albert, having spent the weekend at Blaine and Jacquie's after a couple of days at Ron & Norma's. We caused a lot of excitement in Shields. I don't think they get a lot of converted Prevosts stopping in Shields or even passing by Shields. And the internet satellite system was another topic of conversation. It was great to get reacquainted with Ron and Norma - we haven't spent any significant amount of time with them for a long while. They took us to the Hole in the Wall Restaurant on Thursday evening. That was a taste treat to be long remembered.

We moved to Saskatoon on Friday hoping that we would get in some boat time on the river but that wasn't to be. It was too cold yesterday and too windy both days. Today has been an absolute bear for wind. I'm worried that the dish is going to blow over despite the fact that it is snuggled up against the bus in a well treed campground and staked down.

Marilyn has been up at the hospital most of the day. Anne isn't doing well after having emergency surgery for a strangulated hernia last week. She recovered well from the surgery but she has some kind of an infection and today she developed pain whenever she swallows so she hasn't been able to eat or drink. She's a tough old bird but at 101 I guess some of the systems just aren't as resilient as they once were. We'll likely stay here all week. I have to be in Brandon on Wednesday but I can leave from here just as easily as from Nipawin. We have to be back in Saskatoon next weekend anyway because it is RJ's birthday and because I have some meetings there early next week.

I think it is time to go out and worry about the dish some more. I've got one of those things you use to stake a dog out in the yard. Maybe I'll screw it in and tie the tripod down to that.