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This is a question that I bet many people are wondering. Well the truth is yes to both parts. We are either in or close to being in a recession. But at the same time the stock market seems to be doing quiet well.  We are seeing more than 3 up days each and every week. This is amazing!

I have a friend who keeps complaining that he keep loosing money trading stocks. Well, his reason is that he loves to “Short stocks” which is basically a method of borrowing stocks for a higher price and then selling them back for a lower price, and you get to keep the difference. He thinks the market is about to go down, but it does not. So he ends up loosing money.

This is probably because the stock market buys on the news. What this means is that just because the news tells you that we are in a recession, the individual companies that make up the stock market are not, or if they are, they are not showing it yet.  Maybe the Bear Stearns deal is holding things together. But also there are the market makers who are able to keep the market up, as long as possible to keep us from falling into a more severe recession.  Maybe that is ok for them, but in some ways this is hurting us. A good stock market day usually gives banks an excuse to raise the mortgage rates and if they keep going up, that will really create a deeper recession. As I can see this is all a big game.  I think they are waiting for me to invest again and then they can take me for a roller coaster ride, like I did a few years ago.

Only the future will tell. But 2 things are almost for sure. These daily market rallies are either a temporary pattern that will soon fade, and then we will see a huge sell off. Or, If not we may just see a stale market for a long while.  

This past weekend I went to see Kevin Spacey’s new movie: 21

This is something that I had heard about for several years, it is based on a book called “Bringing down the house” The story is about how some students from MIT made millions of dollars at Casino Black Jack tables, using a mathematical skill called card counting.

To my understanding card counting is a system where you count ones, zeros = negative ones (1, 0 and -1) in rapid succession based upon the face values of the cards that are dealt at a blackjack table. If done properly you can have about a 10 percent advantage over the house. Usually the lower cards will have the value of 1 so, if more low cards are dealt first then your tally will be higher and this means you will have a mathematical advantage over the house. This is not as easy as you think, because not only do you have to know how to count very fast, you also have to have very good eye sight and coordination. Also this is something that Casino owners do not like, and I don’t blame them. Nobody like you to did into their own profits.

Another way that you can make money using statistical calculations is if you are trading in the Stock markets or Forex markets. There is actually software that you can legally use to help you predict exactly when a stock price is going to rise or fall based upon past chart trends, statistical analysis and current buying and selling pressures. I once used a program called Wizetrade that did exactly that. The program does really work, however you have to be very disciplined and follow the training and rules exactly. I also think that the market makers just like the casino operators will find ways to make you overlook your programs recommendations and instead make you interested in buying a stock that does not meet the current criteria recommended by the software program or rules.

I remember falling for these stocks and they caused me to loose money. Other users that were more disciplined did not touch those stocks, so they made the money while I was loosing it.

As for card counting, I only find it interesting to learn or be aware of, but I would never use it in a real live casino. I do not want to get beat up by angry casino security personnel. If I ever play blackjack in a casino I will just play once for fun only.

I really love movies that are of this type and which involve really smart people, and 21 is definitely that type of movie. Some other movies that I enjoyed that are also of this intellectual type are “The Game” with Michael Douglas and “A Beautiful Mind”