Tharp's Thoughts Weekly Newsletter (View On-Line)

  • Article The Big Money Game by Van K. Tharp, Ph.D.
  • Trading Education Ken Long Has A New Day Trading Workshop in April!
  • Trading Tip Stop the Presses – Market History is Made by D. R. Barton Jr.
  • Ken's Class 3 Videos on Volatility Based Trading by Ken Long

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Featurevan

The Big Money Game

I’ve decided to write a series of articles on the Big Money Game.   This is the game in which big money decides that the winners are those with the most money.  You can play as well (because it helps big money play their game) and you might be considered a winner if you just accumulate the latest and best toys.  Watch the ads on television and notice the smiling faces of those who have the latest and best toys.

The basic rules of the game are to: 1) capture the wealth of others; 2) prevent others from capturing your wealth; and 3) if necessary, form alliances to gain to control of your area of business, or even control governments— if that’s the best way of getting what you want.   For example, a few years back, the executives of Enron stayed in the White House and with Prince Charles in Buckingham Palace.  Money becomes power and control and people think they are winners when they have it.   They are not happier and often, they hurt others by playing the game.   Nevertheless, the game becomes their main focus and everyone thinks it is important.   To some, it is the American dream.

In order to win the money game, people have to determine the basic rule that wins (i.e., have the most money) and the rules by which the game is played.   However, those rules are broken or sidestepped as much as possible by the players.   The men who “made” America did things like corner a market; destroy all competition related to that market; buy off politicians; water down stock; etc., etc.   While many of the practices of the “old days” are illegal now, big money players are always finding ways to bend the rules or just taking chances, knowing they won’t get caught.   If you are big enough and important enough, others in power will often overlook you breaking the rules. 

So why am I writing this series of articles?   First of all, I have been teaching the essence of games in Peak 202 for some time.  And even if you haven’t taken that workshop, most of you know that one alternative to the big money game is the freedom game.   You become free, from a financial perspective, when your passive income (money that works for you) is greater than your monthly expenses.   So, if your money expenses are $5,000 per month, and you have no passive income, then your freedom number is $5,000 per month.

I also believe that the consciousness of humanity is going up;   and eventually, all of humanity will wake up, meaning we treat each other as one so that the whole world is “us.”   That’s happening now.   There is a direct correlation between your level of consciousness and your happiness.   I’ve watched my level of happiness go up to the point where it is constantly around 75-80 (on a scale that goes from -35 to +85).    And since I’ve become a oneness trainer, I’ve seen dramatic changes in my Super Traders as well.   Most of those who have completed Super Trader I now have happiness scores that are consistently above 75 and I would consider some of them to be awake.   Oneness now says that as of January 21st, there are over 350,000 awake people on the planet and I personally know around 150 awake people.   Five years ago, I didn’t know any.  

In order for the planet to wake up, the big money game as we know it has to end.   We can’t have rich people keeping poor countries in debt, and leaders in those countries taking everything for themselves, including the food that others need to survive.   As people begin to wake up, they see it is their duty not to play games that hurt others.   I’m not talking socialism or something similar here; I’m talking about people’s consciousness changing, and in turn, following sound spiritual principles.  As this change in the game begins to happen, everything we now know will change.

Let me give you an example of how the game has been played and why it has to change.  John Rockefeller formed the Standard Oil Trust in Ohio in 1882, which was basically a monopoly for petroleum.   Standard controlled wells, refining and transportation.   If you wanted light (kerosene) for your house, you paid the Standard Oil Trust; however, making sure that everyone could have light is certainly progress.   When electricity was invented, however, more homes were able to turn on the lights. .   Electricity could have been the end of the petroleum industry; and what difference would it have made to those who were already very rich?

Then, a new development came into play, as Henry Ford developed an automobile that everyone could afford.  He thought that alcohol was much easier for most Americans to obtain than gasoline, and he wanted his first cars to run equally well on grain alcohol or gasoline.   If the automobile industry moved towards alcohol, cars would have taken a different course and the greenhouse gas effect of the 20th century would have been at least mitigated (because alcohol is far less toxic to the environment).  

What did Rockefeller do?   He put his money behind the prohibition amendment.   Do you really think that prohibition was adopted because a lot of people thought that others shouldn’t drink?   No, it was big money making sure that the petroleum industry continued to thrive, even as people switched from kerosene to electricity and automobile ownership became widespread.   That’s a prime example of how the game is played.

As people awaken, however, there will be a movement toward helping others, toward increased happiness, toward more abundance for all, more tolerance for all, and the cessation of violence toward others.   Wars, another way the money game is played, will be a thing of the past.   I wouldn’t have thought that this was possible in my lifetime even two years ago, but based upon the changes I’ve personally seen, I now think it will happen.   Perhaps I’m a just a crazy old man, but what if I’m right?

Anyway, I’ve been telling people we have been in a secular bear market since 2000, and that it could last 15-20 years.   However, the fundamental conditions for much of the world are not sound at all.   So, I think this bear market might just end with a collapse of the entire system.  If it weren’t for my involvement with oneness, I might be very depressed by this foresight, but I now believe that from the ashes of such a collapse, something wonderful will arise! 

As a result, I am inspired to write a series of articles on famous people who have played the money game, and give you some of the rules they lived by. 

First, we’ll explore some famous people who dominated the economics of at least the United States.   These people will include:

Name

Commentary

John Jacob Astor

Dominated the fur trade in the early US and ended up owning much of NY City.

Commodore Vanderbilt

Steamships and then railroads into New York.

Jay Gould

Owned much of the US railroad network.

John D. Rockefeller

Cornered the petroleum industry.

Henry Flagler

The mastermind behind Standard oil concepts who built up the state of Florida.  Miami might not exist without him.

Mayer Amschel
Rothschild

Father of the Rothschild Dynasty. While that dynasty was primarily in Europe, it also played a part in the United States. The Song from Fiddler on the Roof called, “If I Were a Rich Man,” really in Yiddish is, “If I were a Rothschild.”

Nathan Mayer Rothschild

Founder of the British branch of the Rothschild family banking dynasty.

August Belmont

An agent of the Rothschild House who got rich after the panic of 1837.

Andrew Carnegie

Cornered the steel industry.

J.P. Morgan

As an investment banker, controlled electricity, steel, and railroads in the US.  He also helped finance the US through the panic of 1907.
However, he may not have been one of the richest men because the Rothschild’s indirectly owned much of his Empire.

Hettie Green

The Witch of Wall Street, one of the wealthiest, American women ever.

Russell Sage

Made his fortune loaning on stocks and bonds, and charging high interest rates so that people couldn’t pay and get their stocks as a result. One of the richest Americans if not the richest in the world.

Paul Warberg
Federal Reserve “father”

The Warberg family and the Federal Reserve definitely deserve a special mention.  The US income tax and the Federal Reserve came to Americans like two twins.  When the Fed was born, a movie cost 5 cents.   Today, it is $15 -- that’s the legacy of the Fed.   And who has gotten rich on that inflationary trend?

Henry Ford

Made the car an essential that everyone could afford.

Bill Gates

Listed as one of the world’s wealthiest men of all time.   One of my Super Traders used to work closely with him, so I may defer the article on him to that person.

Warren Buffet

One of the top investors of all time and also one of the world’s wealthiest men of all time.

The people listed above are typically thought of as American Heroes, but were they?
On the other hand, it is probably worth talking about a few people who were real scoundrels as well…

Lord Gregor McGregor

One of the great scoundrels of the early years who was never sent to jail.

Daniel Drew

Another real scoundrel who learned about watering down stock from watering down cattle.

John Perkins as an example of an  “Economic Hit Man”

I plan to include a few examples from John Perkins book, Confessions of an Economic Hit Man in this section.  It will provide excellent ideas about the rules of the big money game and why it must end for Oneness to be possible.  And the “Hit Man” was just carrying out orders!

10 of the people above are listed among the 25 wealthiest people of all time, so it’s a good selection.  And McGregor and Drew are among the most scandalous. 

Incidentally, I now have framed autographs, usually on stocks certificates or bonds, of everyone on this list, except the founder of the Rothschild dynasty and Paul Warberg.   I’ve been studying these people just to familiarize myself with my own collection.  The documents and signatures will all be framed and on display in our offices by the end of 2013 in our Robber Barron’s Hallway.

My plan is, the first part of this series will consist of a series of 15 articles (but perhaps more) on these famous people.  I will probably read several articles and sometimes even a book on most of these people, but don’t expect a detailed treatise on their lives.   There are lots of myths and history has a way of promulgating them.  It’s very difficult for a casual reader to separate myth and fiction from what actually happened.  The winners tend to make history, and history is just a series of beliefs (many not true) about what happened in the past.   However, my primary purpose will be to show you some of the rules by which these people played the money game. As for that task, I believe I can do a good job.

By the way, while many of these people hurt a lot of others in their rise to power, modern civilization also would not exist without them.  We all owe a debt of gratitude to these people for large buildings, various forms of transportation, modern finance, medicine, etc. 

In this series of articles, I also want to cover some of the great panics and disasters that have occurred.   Some of the one’s that might be included are as follows:


Year

Description

1637

Tulip Mania Bubble

1720

The Mississippi Bubble

1796-7

Caused the Buttonwood agreement

1837

Panic of 1837

1857

Panic of 1857

1873

Initialed long depression

1893

Panic of 1893

1896

Panic of 1896

1901

Panic of 1901

1907

Panic of 1907

1929

Great Crash and Great Depression

I plan to choose those I find the most interesting among this list to write about. I plan to write about at least five of them. I am thinking of including some modern ones such as 1973-4 oil embargo; 1980-1982, the Hunt Brothers Silver Corner, the Dot Com Bubble, Subprime Crisis, etc.

My overall goal in these articles will be to give you a great idea of the money game, how it’s played, and how it may totally collapse in the future if we do see a significant increase in human consciousness.  Although your world could change completely in the coming years, you’ll understand how it will be for the better and that no one has to suffer in any way through those possible changes.   To understand this concept better, read about level II transformation in my new book, Trading Beyond the Matrix (released earlier this week).

Finally, I plan to devote some articles to different ideas about how the money game could be played.   These ideas are harder to find because these people did not survive when others were using force to play.   For example, American Indians were largely wiped out by those playing the big money game.  Native Americans generally had no ideas of ownership and believed that it was the job of the tribe to ensure that everyone had enough to live.  I find some of their ideas quite noble, and I plan to discuss them in this series.

At the conclusion of about 30 articles, I think I’ll have a much better idea about how the big money game will change.   I expect to spend the next few years working on this project.

About the Author: Trading coach and author Van K. Tharp, Ph.D. is widely recognized for his best-selling books and outstanding Peak Performance Home Study Program—a highly regarded classic that is suitable for all levels of traders and investors. You can learn more about Van Tharp at www.vantharp.com. His new book, Trading Beyond The Matrix, is available now at matrix.vantharp.com.


Trading Education

Workshops

Ken Long Has A New Day Trading Workshop in April!

April 6-7

Oneness Awakening Workshop

April 19-21

NEW Day Trading Workshop with Ken Long

Learn two day trading systems, the Frog and the brand new RLCO system. You'll be ready to trade them on your own when you leave this workshop!

April 22-24

Live Day Trading Sessions with Ken Long

Trade the Frog and RLCO side by side with Ken for three days of live trading.

May 17-19

Swing Trading with Ken Long

May 21-23

Forex Trading with Gabriel Grammatidis

June 20-22

Peak Performance 101

June 24-27

Peak Performance 202

Jun 29-Jul 1

Peak Performance 203

"The Happiness" Workshop

July 13-14

Core Trading Systems

Longer Term Trading Systems

To see the schedule, including dates, prices, combo discounts and location, click here.

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Trading Tip

vanStop the Presses – Market History is Made!


We interrupt our normally scheduled series to present an important market flash.  History was made and must be disclosed.

By most accounts, Monday, February 25th, 2013, was an ugly day in the markets—the kind of ugly day you see every few months.  Of course, it is noteworthy that it happened during an extended grinding bull market. 

However, actual history has been made.

On Tuesday, during our hedge fund morning meeting, my business partner and market maven, Christopher Castroviejo said, “I want to show you a chart.”  We looked at the chart below representing the Dow Industrial Average cash index:

chart 1

 

Clearly, there is a lot of stuff going on here with the key reversal day, etc.  We then took a look at how many bars this single bar consumed.  It has a higher high AND a lower low than all 20 of the previous daily bars (and it just missed getting the 21st).  Christopher then said something that astonished me, “I don’t think I’ve ever seen that before in my whole career.” 

Believe me, that’s saying something.  Christopher started clerking on Wall Street in the 1960’s, working for Trader Vic, Victor Sperandeo.  He’s seen just about everything and knows just about everyone.  So for him to say he’d never seen something before, meant that I had to check it out myself.  Here’s that same chart showing all the bars that were eclipsed:

chart 2

Digging into the Data

Christopher’s comment sent me into a research frenzy.  First, I pulled up and dug through 50 years of daily charts, by hand; all for you, dear readers (okay, and to satisfy my curiosity).  Nothing I found was even close to a 20 day outside bar.

Worried that I might have missed something and wanting more data than my charting package had, I went to my trusty Dow Industrial Average data spreadsheet, going back to November of 1928, when the recording of daily highs and lows started.  Using Excel’s “min” and “max” and a few conditional statements, I was finally convinced to say, with statistical certainty:

Monday, February 25, 2013 was the first day in the known history of the DJIA to have completely engulfed the price ranges of the previous 20 trading days.

That’s pretty amazing!  Will this historical day be meaningful for trading?  At the very least, it took the wind out of the bull’s sails in a big way. Unless the Italians find a way to reinvent democracy, or at a minimum, put rational people into office (both seem equally unlikely), we’ll have weeks of range-bound trading trying to recover from this historic drop.

Next week, we’ll continue to dig more into dealing with the uncertainty inherent in trading and investing in our series on Luck and Trading. Until then, come on people! Where else can you get historical analysis like this for free?

Send D.R. some love, comments and feedback to drbarton “at” vantharp.com

Great Trading,


D. R.

About the Author: A passion for the systematic approach to the markets and lifelong love of teaching and learning have propelled D.R. Barton, Jr. to the top of the investment and trading arena. He is a regularly featured guest on both Report on Business TV, and WTOP News Radio in Washington, D.C., and has been a guest on Bloomberg Radio. His articles have appeared on SmartMoney.com and Financial Advisor magazine. You may contact D.R. at "drbarton" at "vantharp.com".

Disclaimer

 


Ken's Classkens video

Ken describes another case of persistent preparation meets occasional outsized opportunity in this 10 minute trade of the day video.  During the last weekend review, Ken highlighted his interest in volatility based trades for Monday, February 25.  He took his first trade in the opening session and his second set of trades in the afternoon caught the major move of the day yielding Ken more than 20R for the day. 

http://youtu.be/ASDzKggQKdo 

The second video is more of a lesson at 22 minutes where Ken discusses at length the volatility framework behind a series of trades made last week.  Ken goes into some depth on how he prepared, found the opportunity for these trades, and followed the market intraday to capture his gains. 

http://www.youtube.com/watch?v=BzBNy7eAggo

This trade is a continuation of the volatility trade from February 25, 2013. It takes advantage of the phenomenon of short term memory in the markets to be prepared to trade a continuation of the volatility that seemed to catch the market by surprise yesterday.

http://www.youtube.com/watch?v=pEGsU36ts9o


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Feb 27, 2013 #618

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