Every so often it's important to take a break from the market or business in general. So this past weekend, my wife and I took off for a long weekend in Maine where we have a summer house.
I always enjoy going back to Maine, as it reminds me of my roots in the north of England. I love the rocky coastline and the coastal air which always seems so fresh to me.
Another big attraction is my father-in-law who is one of the most interesting men I've ever met. This past Saturday we all went out as a family to have a nice dinner with my father-in-law, his wife Jean and my wife Sally. We had a wonderful dinner and great conversation fueled by nice wine. It was during this dinner that my father-in-law put these words in my mind which I want to share with you today.
We've all heard the expression lately that a company is too big to fail. But my father-in-law in his wisdom came up with the opposite of that and said, “companies are too small to succeed.”
Now my father-in-law is not a business man, he is a retired Admiral and is as sharp as a tack.When I thought about his statement, I thought to myself that 70% to 80% of all the new jobs created in the United States are created by small businesses.
So I said to myself that it would be nice to see the Obama administration do something for the job engine of America (small business). But no, we spend billions saving industries that had gotten too big and arrogant. Becoming arrogant in business and life is a sure sign that the next move will be on the downside. I think the Obama administration could have gotten a bigger bang for their buck had they given tax incentives to small business as well as cutting the capital gains tax to zero.
Anyway, that's just a thought inspired by my father-in-law while I’m on vacation.I would love to know what you think about this and also what you do to relax when you get away from business and the markets. I will be back in the office on Wednesday and I'm looking forward to reading your comments as my internet connectivity here on this small unnamed island is extremely limited.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
A follow up to the first post. The Indices instructions are a bit confusing as there is conflicting information in the explanation. It says use monthly for direction and weekly for timing however goes on to say weekly for direction and daily for timing. Which is correct ?
I have posted the url and the portion in question below.
Many Thanks,
-Benjamin
http://club.ino.com:80/trading/marketclub-help-section/flash-charts/trade-triangles/how-do-i-interpret-the-trade-triangles-when-would-i-enterexit/
Indices
Monthly Triangles determine trend and possible entry points.
Weekly Triangles determine timing : exits, entries and re-entries.
The last triangle issued on the weekly chart should always be used to identify the overall trend. You can also use the weekly triangle as a potential entry point if you can get into the market within the last 3 trading days of the signal. Then you are to look at the daily triangles for possible exit and re-entry points, or entry points if your weekly is in a steady trend.
Key Rule: always trade with the trend. Make sure your weekly and daily triangles correspond in direction.
Benjamin,
That was completely my fault, but I've fixed it. If you are using the monthly/weekly method you want the two timeframe triangles to match... same idea if you were using the weekly/daily method. The methodology you choose it up to you.
Call the support team if you have any questions 1.800.538.7424, ext 112.
Best,
Lindsay Thompson
Director of New Business Development
INO.com & MarketClub
Hi,
I am a college student from the Philippines. I work and study at the same time. It's good to have an hour a day to breathe fresh air.
God bless.
I knew way back before the election that Obama was NOT the man this country needed.
He is destroying the Free Enterprise System in this country.
The Stimulus Package was a sham and is not working and nerver will.
Can't under stand why with his huge Economic Team, that someone can't see and tell Obama to try what has been proven in the past to work to end a recession. All he is doing is extending this recession.
Follow what JFK, Reagan, and Bush 43 did. CUT TAXES and let the people decide how the money will be spent. Get rid of Government and all their regulations.
I don't need the Government to tell me what car I need and the kind of light bulbs I should use.
The country started going down the tubes with the dumbing down of American and the straw to ruin the US is Obama himsef.
Sorry, forgot to add great post! Can't wait to see your next post!
Remember "Small Is Beautiful: Economics As If People Mattered" by E.F. Schumacher? Some good ideas.
I knew way back before the election that Obama was NOT the man this country needed.
He is destroying the Free Enterprise System in this country.
The Stimulus Package was a sham and is not working and nerver will.
Can't under stand why with his huge Economic Team, that someone can't see and tell Obama to try what has been proven in the past to work to end a recession. All he is doing is extending this recession.
Follow what JFK, Reagan, and Bush 43 did. CUT TAXES and let the people decide how the money will be spent. Get rid of Government and all their regulations.
I don't need the Government to tell me what car I need and the kind of light bulbs I should use.
The country started going down the tubes with the dumbing down of American and the straw to ruin the US is Obama himsef.
The comment you made is just the sort of thing that Republicans always seem to saw, i.e. just cut taxes on us and we brave pioneers will make a better world. We saw very recently the fruits of irresponsible tax-cutting. We live in a complex world with a complicated economy. When our financial system was in deep trouble and big international banking was seriously crippled. George Bush and his Administration begaina bailout program to melt that freeze. When they left office the financial system was still in serious trouble and getting worse. So the Obama people and Congress worked out a further bailout program. That term is somewhat invidious, but the problem was, and is, a national one and no aid to any small businesses was going to cure it. The assitance to " Wall Street" is naturally unpopular but hurling stones at rich bankers will not solve our problems. Serious financial undertakings have been made and more will be needed. Trillions of dollars of indebtedness are not welcomed by anyone, Republican or Democrat. But damning our President for doing the best he can to cope with the problem is not going to benefit the nation or our economy. Cutting taxes on Joe Glutz, the Plumber or anyone else is not the answer we need at this time and no serious person can pretend that it is.
There are at least two worlds: the ideal world and the real world.
In the ideal world, I could not agree more.
In the real world "too big to fail" is sad but true.
Imagine the chaos and panic if the government had let the banks fail, or AIG for that matter. There would also, in my view, have been a major drop in the economy and markets if GM or even Chrysler had been allowed to fail.
Whether we like it or not, the markets and the economy are all about confidence; both would have been irreparably damaged if the actions that were taken had not been taken.
So while we might wish and even divine that the resources be devoted elsewhere - they could not have been without disastrous consequences.
Even though it may look "wasted" this money was absolutely not wasted - generally it could not have been put to better use as it likely prevented (not over yet) an outright depression. Once confidence is lost it is very dissicult to restore.
And no, I do not work for the government nor do any of my relatives and I dislike government intervention as much as anyone. There simply were no other choices - and we all know who to blame for that - the laissez faire to a fault policies of the Bush Admnistration that was warned and could have easily prevenmted this through timely and minimalist legislation - now we could need the elephant gun approach to get out of the mess that they created even though they had every opportunity to avoid it.
And no, I am not a Democrat nor am I related to President Obama. I am one of those who makes the country work by voting for the party that makes the most sense (usually Republican - but not now).
No opinions - simple fact.
And we live in the real world; not some other world as a brilliant man by the name of W. Edwards Demming used to frequently state.
Free enterprise is where it is at. And Small companies do best when there is real free enterprise. Big overblown bureaucracies can not compete with boots on the ground!
The goverment would do well to foster free enterprise by regulating the virtual monoplies that now control american business through phony free trade and big is better. Big has a place, but not to crush american ingenutiy, but to help feed the oppertunities for small business, as a support for the real economy!
Obama and his party are putting our country on a dangerous and dark journey. The end game here is a new America much like England in pre-Thatcher days: a semi socialist state with huge union power and a business community considered corrupt and greedy. The great power of our country will rest in a few elites. God save us.
I read your post Adam and saw the nice picture! Your Dad has wisdom "beyond his years"!! However, small businesses will always be innovative, always finding new solutions and often end up with their ideas stolen by the "connected" bunch. I don't want any "help" from big government. They have screwed up too many things. That has been my lesson learned through my dad and mom who ran their own businesses, as well as my own experiences which parallel theirs. What we need is less government, more "mind your own damn business" government and less interference. You would be amazed at what can then transpire!!
The government doesn't need to "help" small businesses. That would be just as much a disaster as anything else the gov't does.
And we need to replace the notion of "too big to fail" with "too big NOT to fail." Let the speculators come in and by whatever parts they think can be viable and let the rest sink. That's the only hope for recovering from this mess.
The ideas for reducing taxes are good. Regardless of the tax, a lower tax (or better yet, no tax) will be better for society in the long run.
I am a small business owner and I can relate with too small to succeed The government places barriers to entry in the form of licenses and regulation so stringent that most business don't even get off the ground or are cut short from succeeding due to high costs. What you then get is a strangling of ingenuity and entrepreneurship and products that are less then promising and over priced as the "big boys" on the block would like it
The Admiral is correct - small companies neeed all the assistance they can get. Usually these enterprises are started with family suport & funding based on an idea or filling a niche the larger enterprises won't fill until there is hugh pent up demand.
These companies also are managed better & thus are leaner than larger too big to fail Co.s that are bleeding $s.
Here in Vancouver BC, are forestry industry went down the tubes many years back, however our gov't like your's chooses to support dinosaur car companys back east. Dollars are being fed where the politicians - family & friends programs reside to line their pockets before they get voted out in the next term. Sorry for the rant, but your column get me started.
Ps -Enjoy your time off with your family - tiime is precious & seems to go faster as we age 🙂
Warmest regards,
Rup S.
"..as well as cutting the capital gains tax to zero."
I didn't understand this. How does this help the economy?
Investment dollars do not stay idle. Capital gains from small businesses usually go into investments, improvements, and other small businesses.
A the bigger the reward, the bigger the risk that investors and entrepreneurs will take with their capital. So instead of the government trying to capitalize the losers, let the winners take a chance.
Some day, we'll get our politicians back to American values of free markets, entrepreneurship, and individual responsibilities.
how about for starters an across the board 50% tax cut? I can not think of a better way to inject a shot in the arm of the economy of pure stimulus.
and that is just for starters! hehe
Professor (enterpreneurship) at the university of Oulu (Finland) made similar comments based on research he had done on startup companies. Companies who aim low tend to achieve low. Those who take big steps to achieve big status are most likely to become big. I bet the next thing Obama is going to do... is to tackle the next beef and that is the small business. The logic here is that whoever takes the biggest case is eventually going to eat the rest. Planets grow similarly. But if one creates a black hole, like GM now, there's a big hole.
Politician committed to change cannot stop here at the big companies' station. I think new companies like Tesla Motors are going to get some or Obama will not get another term.
I couldn't agree more.
The too-small-to-succeed label could unfortunately apply to a small company named Cubist (CBST) that developed a treatment for the huge problem caused by our overuse of antibiotics: MRSA -- methicillin-resistant Staphylococcus aureus. The big generic drug company, Teva, recently filed with the FDA a request to produce its own generic version of Cubist's drug, prior to the patent expiration dates (2016 - 2019). Allegedly, TEVA claims that the Cubist patents "are not infringed and/or invalid."
Unfortunately, the firm that has the most money to litigate usually wins in our system, so Cubist may not be able to protect and profit from its discovery.
I have never owned Cubist and I do own TEVA,— I bought it before I learned of this. But I intend to sell the TEVA as soon as it reaches my price target, because I have learned that the market can and does punish companies who use questionable methods to attain goals. After all, if you can't trust them to play fair with competitors, how can you trust them to report finances honestly?
Good thoughts, Adam. Sure wish Obama was listening.
Adam,
Enjoy your family, life is short.
What could have happened if they had given $1 million to small business ( 20 employees ) instead of billions or trillions to all the failing companies.
though I'm a Obama supporter, I'm very unhappy with any of the bailouts occurring.
I know there'd be tremendous job loss had any of them been left to fail (and who's to say that they still won't or already have...) but arrogance shouldn't be rewarded.
Tax incentives to small biz would be a good idea.
I'd love to see a Capital Gains tax at zero, but I'm not sure I see how that would do the US or related world economy any short term good.
But I'm more and more convinced that the heart of the matter is arrogance in our elected officials, Congress in particular. Here is NYS we specialize in useless elected officials. I don't think anyone does it better.
No question that when we take a look at our current government, we have to just hope things can be or have gotten to be too big to fail. We surely need "a little smallness just might work" concept applied there also. Just don't anyone hold their breath.
jof
Adam,
Your father-in-law is a winner. Best to Sally and the rest of the family.
Dave
Hello dear Adam,I wish you a wonderfull vacation,I''m in the M.East and
recreation starts with the letter R which is at the almost end of the alphabet,a bit difficult,so I enjoyed yr p.card,its beautifull,enjoy,life is short, Jay.
Dear Adam,
I like your poet side very much! Perhaps we have this side in common...I always see your analysis and I like to share it with friends.Usually I don't use it because I have my own analysis more accurate and efficient than yours...As perhaphs you may know, I'm an analyst since more than 20 years specialised in the management of cycles in markets usually "global macros" as forex, commodities,stock indices and interest rates.From analyst I became a Manager-Analyst in these markets!This was a big evolution in my life.You know I cannot afford to have an 80% succes in my trades ...I need at least 99.99% probabilities on my side in order to enter a trade , if not I don't enter because I hate risks.So I saw that your triangle technology is interesting but is not enough for me as its probabilities are inferior to mine.So I have builded my own tools.Of course as your technology is secret mine also is!My performances are fluctuating between a low of +7% and an up to +120% in USD with a leverage of one!.Usually I'm averaging a +25% performance per year.Last year in 2008 my performance was a +17% in USD. I have a low volatility portfolio not exceeding globally 10% of capital.Actually I can pilot any portfolio with a maximum risk of 3% with an unlimited reward with any kind of markets and volatilities.
I don't know if exist managers like me doing such performances.You know I'm serious I mean I'm managing segragated customer's funds so I cannot lie as the bank is doing all the administration for my clients own seg accounts.I know that there are a lot of broker-managers cheating with there own hedge-funds but that 's not my cup of tea.
I'm small probably "too small to success" but what can I do?People don't know me.But perhaps one day they will know.
I'm trying to sell my services to people I know and feel that they merit my management and I was thinking to you.
I would like you and your friends to profit at maximum of my management.May it happens one day! Godbless...
When the big auto bailouts were announced, I often wondered to myself what a small innovative company like Tesla Motors could have done with a couple billion.
Hello Adam, Maine is always a gorgeous place. I grew up in CT and I have a sister who lives in Kennebunkport, ME with her three very imaginative children and their secret Dragon Forest. Anyway, I whole-heartily agree with you on helping small businesses. My future wife & I run a small brokerage business doing land administration for the oil & gas industry here in Colorado. Right now times are very tough for this industry as many of the small firms have laid off up to half of the staff. The large oil companies are planning job cuts in the tens of thousands over the coming few months. To make matters worse here in Colorado, the Governor, Bill Ritter, recently signed a bill which has basically halted all CBM plays (Coalbed Methane gas) because of water issues. Because of this new law, all the O&G companies are looking elsewhere to drill. What amazes me is the fact that during the early 80's and now times are very tough for the oil business but the US government does not bail them out. All the general public hears about were the record profits that they made for two years which was mostly due the the high price that oil reached from spectulation.
But enough about our industry, my future wife, which our wedding will be on July 18, recently purchased a fifth wheel and we enjoy just packing up the dogs and heading out anywhere we can go fly fishing & hiking. In October we are heading for Maine to see family which is always a beatiful time of year in New England (and less crowded).
Hope you & Sally enjoyed your little getaway.
Sincerely,
Tom
"Too small to succeed" is unfortunately too true. Of course I'm not just talking about investment capital and financing, but ideas. Often we judge the source of an idea or invention rather investigate it on its own merits.
Living (thankfully) in rural america I meet many people who have had to sovle problems on their own with no or little assistance from anyone else. For example, I have a farmer friend that "accidentally' developed very small heat plant that will burn any biofuel (garbage, wood chips, tires, manure, hurricane debri, etc) with no toxic emmission. He uses it to produce electricity, steam for heating, and distilled drinking water. The DOE has certified the concept and results, but has chosen not to help expand for a larger test. Why not? Because it didn't come from one of their billion dollar facilities. "No farmer without an engineering degree could possibly come up with this!"
Your farmer friend must file a patent ASAP!
Get your friend to send it to me, I'm sick of paying shysters for my heating and lighting bills !!!
The later part of this video blog (starting at the 6.45 point)really drives home your message Adam
http://www.europac.net/videoblog.asp?a=watch
Hi Adam....Enjoyed your memo from Maine......I am considering joining Market Club but I have a question I'd like you to address 1st if you don't mind.....I would appreciate it if you would classify your time frames a bit more. Such as,ETF's, which ones are Daily/Weekly and which ones are Weekly/Monthly?....And what about indices like DIA, QQQQ, and SPY? You have previously said gold, oil, commodities, currency and bonds are Daily/Weekly, but does that also include the ETF's for those sectors?.....Let me thank you ahead of time for clarifying this enigma that I and many others would like to solve......Ron
Ron,
Thank you for your feedback. Please find the link that will explain our approach right here.
http://club.ino.com/trading/marketclub-help-section/flash-charts/trade-triangles/
If you have any further assistance just give our help desk a call. 1-800-538-7424.
Thanks,
Adam
Hi again Adam....Thank you for your response to my question directing me to your Time Frame FAQ link. (which I was already aware of)....BUT...it still did not answer my questions on time frame differentiation.....The FAQ answer stated that ETF's are Weekly for signals and Monthly for trend...It also states that Indices are Daily for signals and Weekly for trend.....Here is the enigma....DIA, SPY, and QQQQ to name a few, all represent an indice, yet they are all EFT's....Under which time frame classification do they go???....Same scenario for the USD, GLD, USO, and DBC ETF's, where do they belong in the time frame scheme of things?.....The FAQ answer pertaining to these questions is nebulous at best and I would appreciate it if you can help me to sort it all out.....Thank you again......Ron
Ron,
I got it.
If it's an ETF, or an indice, use the monthly for trend and the weekly triangles for timing.
It's that simple.
All the best,
Adam
Hi Adam.....One more time and then I will leave you alone, but there is still a discrepancy.....In the FAQ's answer you state that Indices are Weekly for trend and Daily for signals....Yet in your above response to my last query you say if it is an indice then use Monthly for trend and Weekly for timing........Still confused in Arizona.....Ron
Ron,
Please give us a call at 800-538-7424. I would like Jeremy from a company to explain this in more detail. I'm sure he'll be able to help you and it'll be much more personal that way for you.
All the best,
Adam