A Look At The Stats

The blogging software tracks statistics and here are the most viewed from Random Roving:
#1: "The Onion Peels In Argentina", Apr 14, 2009, 5,170 Pageviews
This one stood out from all others for some reason.  It might confirm that images speak louder than words.

#2: "Darkness On The Edge Of Town", Sep 23, 2010, 1,025 Pageviews
What can I say. Bruce is "the man".

#3: "The Slope of The Sand Pile", Apr 15, 2009, 652 Pageviews
Once again, images speak louder than words.

#4: "The Loss of A Legend", Jun 5, 2010, 414 Pageviews
One of the 5 people that I'd like to meet in Heaven.

#5: "The Dow Jones Industrial Average / Gold Ratio", Feb 28, 2009, 269 Pageviews
Glad to see that some of my technical analysis made the Top 5.  In my mind, this is the most accurate quantitative chart for defining the cycles.  Keep an eye on this one.  1-to-1 is in our future.

You Shoulda Seen The Ice Sculptures

It seems so long ago back in the tech/dotcom boom. One of my favorite stories was told by my business partner at the time. Back in 2000, his wife worked for Enron. The night prior, he attended the Enron Christmas party in Houston. His memorable quote the next morning was, "you shoulda seen the ice sculptures!". He stated that the room was filled with mega ice sculptures. Melting ice might have been symbolic of what was to come.

Our company had two projects with Enron subsidiaries and it was interesting to watch the rapid ascent and subsequent collapse. It's always fascinating to see how a corporate culture adopts the attitude and personality of the leadership team. Enron was a very arrogant company even before they became famous for it. Drinking your own "Kool Aid" can be toxic. They were Houston's darling and even put their name on our new baseball stadium. All appeared to be well until their ultimate collapse.
Many other ice sculptures eventually melted too...Tyco, Worldcom. Why does collapse always seem to surprise us?

The Slope of The Sand Pile

In my college geology class we learned about the angle of repose of a sand pile. I often run this experiment while sitting on the beach. Build a pile of dry sand into a cone shape and at this magical point, the sand can no longer build up and it cascades down the side of the pile or cone. The physics behind it relates to the angle and slope of the cone with relation to the ground. A limit exists regarding the slope of the pile.

As with sand piles, the charts of stocks, market indices, and even species population curves reveal that an angle of repose appears to exist elsewhere in nature. Maybe this is some sort of natural law or a limit to growth.

The famous market crash of 1929 charted below illustrates an unsustainable slope.

The great Japanese crash or the "Lost Decade" as it's been titled. Twenty eight years and they're still in recovery. Remember when we wanted to be "everything Japanese"? Remember the Total Quality Management craze?

We all were able to experience the Tech Boom and the great ending orchestrated by the Dotcom mania. What a finale' it was. How about the slope on that curve?

The most recent is the Dow Jones Industrial Average charted below. The upward slope is not that steep because the real slope occurred up to mid-1999. The 2000-2008 slope was artificially stimulated by the money printing of the Federal Reserve.



The oil industry is still realing from the dramatic price crash of 2008. A steep advance and steep decline create beautiful symmetry.



And we can't forget everyone's favorite, Enron. While a few bad characters were the manipulators, many others were part of the process.
I presented the chart below a few weeks ago. It aligns investor psychology with the process that has played out many times over the past thousands of years. Don't forget the great Tulip Mania in Holland. It took place in 1637. The human limbic system has a long history of mania behavior.