Queasy Sights

Anyone who has spent lots of time on boats (particularly oceanic offshore swells) with those who have not or with whom it simply disagrees, will know the unmistakable tell-tales of seasickness. First the colour disappears from the suffering one's cheeks. They appear listless in posture, staring into the distance. They hug the sides or rails to provide them with a reassuring proximity to the sea in order that they not embarrass themselves in the event of ummmm an event. Then, they point their nose to the wind desperately hoping and praying that the unsettled feeling that they are going to imminently vomit will pass. They slouch yet further, appear even more pallid - even green. Then, in an involuntary spasmodic contra-digestive ballet, the afflicted sort of weave and wave back and forth trying in vain to hold in what must, against all decorum and effort, come up and out, in a violent, but ultimately cathartic LIFO explosion. This is NOT a pretty site if the afflicted were consuming beer and Cheese-Doodles before they were overcome by the need to involuntarily regurgitate.

Markets, particularly the onset of bear-markets, I would argue, repeatedly display certain similar tell-tales. These may not be readily reducible to numeric formulas, or DeMark counts, but one can often distinguish them when they encounter them, much like the sea-sick would-be sailor. Some are particularly adept at recognition in a BLINK! kind of way. And others seemingly do it more or less continuously. But whereas the human body is bounded by a limited set of vital signs, and the swell of the ocean and rocking of the boat induces a more or less consistent interaction and reaction with the our biological constitutions, financial markets are dastardly complex, rarely if ever invoking precisely the same set of interactions between variables, with the importance of variables themselves evolving dramatically over time. And perhaps the biggest mind-fuck is that markets typically play out over much longer periods, with innumerable traps along the way that plausibly attempt to sway opinion or cause even the most detached observer to waver in her conviction or investment plan. Nonetheless, keen observation, experience, distillation, coupled with constant re-examination, and perseverance can allow one to filter the noise and essentially achieve the same result as looking at the soon-to-be-seasick sailor and correctly forecasting the technicolour yawn about to ensue.

While Lance Armstrong is reputed to have oxygen-carrying arteries the size of a thoroughbred and Roger Federer is (according to sports physiologists) reputed to have a uniquely broad range of motion conferring physiological advantage, one might reasonably look back at Wayne Gretzky and wonder what it was that made this small and slight Canadian probably the greatest hockey player who ever lived, for on the surface it wasn't a physical advantage, in most physical of sports. I recall in an interview, that he described it as vision. To someone who is not an aficionado, ice-hockey is mind-blowingly rapid and chaotic, even for those that skate. But to Gretzky, he apparently sees it all in slow-motion. He is able to visually take it all in and sub-consciously and effortlessly anticipate where and what everyone will do next, adjusting and responding to optimize each turn, movement and pass of the puck. For he wasn't not faster. He just thinks, and responds quicker and better. But for purposes of analogy, I am taken by the concept of seeing with extreme-clarity, in slow-motion, something incredibly noisy, chaotic and complex.

I am no Gretzky, nor do I fancy myself as one. But I do have reasonable and deep experience, and I do ruminate upon events, markets and the macro-economy at length from a position both above and within the trenches, and for what it's worth I have this uncanny feeling that I am seeing this cycle and this probable cyclical and market-top evolving in slow motion in almost picture-perfect fashion, the kind that financial historians will be able to aptly describe while posing the question "What the fuck were they [the leveraged speculators and providers of credit of the era] thinking?!??"