Trader’s Narrative

Bill Cara is a top trading/finance blogger. He’s been featured in major print media, online at Forbes.com and other very prestigious places. Bill is a fellow Canadian and has had an illustrious career in the field of finance. I respect the guy tremendously and look up to him and his success. And I also commend him on the effort that he puts into his blog. There’s just one thing that prevents me from being a fanboy: as a permabear, he makes atrocious market calls and never holds himself accountable.

Here is what Bill wrote on July 6th, 2006, just as we were forming the intermediate bottom that launched the next upleg:

If you are bullish on equities, I think you need to batten down the hatches.
Like I say, there is a storm coming. Time to reef those sails.

Tim Knight, is another highly regarded trading blogger whom I respect a lot. He’s the founder of prophet.net (a great charting tool) and an indefatigable technician. His charts are a thing of beauty. Except, as he himself readily admits, he is also a permabear. Here is what Tim wrote at the same market junction, July 8th, 2006:

I am shorting everything I can. Buying puts on everything I can. Owning nothing. My belief is the market is heading for a sustained, profound fall and my intent is to profit handsomely from its demise. There are certain sectors that seem especially juicy for a fall. Oil services. Gold and Silver. And, to keep it simple, just the good ol’ S&P 500.

Here’s what I wrote around the same time, July 6th, 2007 (Running With The Bulls):

Something similar [Pamplona’s bullrun] is afoot on Wall Street. But very few people are really paying attention and they may ‘get in the way’ of the bull.

I mention that, not to get any credit but rather because it is only fair to show you what I wrote back then myself. I did happen to get it right but only because I was standing on the shoulders of giants.

As a side note, this illustrates perfectly why I like Jason Goepfert’s site SentimenTrader so much. He is able to switch his view and stance as the data and markets dictate. Why else would I recommend him to you and give you a chance at 6 months of free access to his brilliant mind?

Getting back to the topic of accountability… To my knowledge, neither trading blog has gone back and given these calls any explicit attention. Now, I’m certainly not under the impression that bloggers should be held to the same standards as analysts or investment banks or research firms. And I’m not suggesting that we go around like a bunch of hooligans forcing bloggers to answer for their wrong calls. Their archives are there for anyone to peruse.

What I am suggesting is that we hold ourselves accountable. And do so for the simple and self-serving reason that that’s how one learns! Each time we brush a wrong call under the carpet, pretend like our call wasn’t horribly wrong, pretend that we don’t have any losing trades, etc. we deny ourselves and our readers a chance to gain further insight into the market.

So here and now, I dedicate myself to go through my own past calls. I’ll be looking forward (not to the bashing or the pats on the back but) to the insightful comments of fellow bloggers and readers so we can learn something for the next opportunity.