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Your Letters
by: SFO Magazine
Readers' Thoughts and Questions |
Dear Editor:
Michael Milken’s “sins” of 15 years ago would not even land him in jail today. The rest of the financial establishment “paid back” Drexel Burnham and Michael Milken for making them obsolete and launched a campaign to induce government to lead to their downfall. Let’s be honest – junk bonds and LBOs were the bright spots in a pretty boring, ho-hum banking world until Milken came along. As I was aware of Milken’s “after-life,” I enjoyed David Silverman’s story in the last issue.
–Dennis O’Hare, via e-mail
Dear Editor:
That was a nice story about Michael Milken in the April issue [“Considering Michael Milken: 15 Years Later”]. Michael and I worked side by side when he started out in the corporate bond department at Drexel Harriman Ripley and later Drexel Firestone in 1970 - 1972. I did research, and Michael helped sell the ideas to traders, salesmen and clients. These were fun times in the business. I left Drexel after the firm fell on hard times in June 1972 and kept very limited contact with him afterwards. However, I followed his career as anyone on Wall Street would. We can forgive him of any sins of the past. He has since made this a better world for which we should all be grateful. This cannot be said about many of his critics.
–Richard S. Wilson, Bedford, NY
Dear Editor:
In David Nassar’s article, “Cutting through the Chaos with Electronic Trading: A Deterministic Approach” [April 2005], he explains that the output of systems should produce a deterministic result. We call this stacking the deck of probabilities in a trader’s favor. To be clear, a system contains two important components: the strategy and the scanning platform that models it. David mentions the Profiler platform and a couple of possible strategies it uses. Here’s a test to measure what a good system must do:
1. Improve your trade performance by “stacking the deck” in your favor;
2. Maintain the discipline contained in your trading plan; and
3. Model any strategy, historically and in real-time, to separate the wheat from the chaff.
Good scanning systems generate trade ideas for execution.
–David Aferiat, Managing Partner, Trade Ideas, LLC
Dear Editor:
In Michael Kahn’s story in April, entitled “The Lowdown on the Decennial Cycle,” he indicates that years ending with “5” and “8” have tended to outpace the others. According to the study cited, that would portend that the best period of any decade, on average, is coming up later this year or very early next. In the “Ask Slim” column, on the other hand, the “January Barometer” is detailed, indicating that “something is probably in store for us this year, and it likely won’t be pretty.” His feeling is that, if you analyze the January Barometer, the odds are that the stock market will see a loss of about 18 percent or more. Only one will be right.
–Dan Gestino, via e-mail
[Editor’s note: Yes, only one will be right, and I’m hoping it’s Kahn. I am very impressed that you read the magazine that closely. If there was the no-fail formula for what the market portended, neither Kahn nor Slim would be writing for us. Instead they would be basking in the afterglow of their knowledge and their riches. Differing opinions do make the world interesting.]
Dear Editor:
I really enjoyed your recent cover story on philanthropy [“Editorial – Beyond Investing: Philanthropy Large and Small,” March 2005]. I am blessed to work for a man that had the vision to start a company with the idea of giving away half of the profits to charity. Barbara Bush is right on in that everyone has something to give, and the more people that are exposed to that mentality through articles such as yours the better off we will all be.
–Dick Cancelmo, Houston, Texas
 
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Editor's Note
For those who realize that they may be no better at predicting the market’s movement than anyone else, trend following may be just the alternative.
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