Here's is one of the comments to a recent blog...."But how to evolve spiritually when you think about losing your job and an insecure future "

There is a beauty to what you ask. Whatever you worry about tells you what you need to work on to evolve spitually. Let me give you an example. I realized recently that I had been a "victim" on a con artist and I became both angry and anxious. However, from a spititual evolution viewpoint, it was great. The very feelings that were coming up were what I need to work on.

I ran my thoughts about the person involved through an elaborate releasing program. And when I was totally clear about him (no thoughts of angry; no victimization; no wanting control; etc) then I was ready to take any necessary action, but only when I was totally clear.

Your feelings of insecurity create just that insecurity. Work on them until security is no longer and issue. Then you'll be ready for the next issue. And what's really great about trading (or poker) is that issues continually come up.

And how do you clear these issues. We'll that's covered in the Peak Performance Course, but if you are not a trader, then I'd recommend doing A Course In Miracles (which is available in German). Hope that helps.

Posted by Van K Tharp at 06:15 AM | Permalink | Comments (5) | TrackBacks (0)

Felix Dennis in his new book, mentioned in the last post, states... "I have yet to meet a single really HAPPY rich man or woman - and I have met many. Am I happy? No. Or at least, only occasionally."

Later in the review Dennis says: "Never have I met a self-made rich man or woman whose family or relationships were not plagued by the burden of creating a fortune, even a small fortune, the childless Dennis writes. "Somewhere in the invisible heart of all self-made wealthy men and women is a sliver of razored ice."

And the next quote is great... "Ask me what I will give you if you could wave a magic wand and give me my youth back. The answer will be everything I own and everything I will ever own."

In my years of consulting with traders, I've always stressed the importance of a balanced, happy life. And that the secret of financial success is financial freedom, not being rich. But remember what I said in the last blog. I think the purpose of life is to be happy. This involves evolving spiritually, which I stress in my psychological work with traders, and doing what you LOVE to do.


Van

Posted by Van K Tharp at 03:53 PM | Permalink | Comments (4) | TrackBacks (0)

Felix Dennis, one of the richest man in the U.K, has written a new book entitled "How to Get Rich." In that book he says that the fear of failure is what holds people back. Specifically, "if you are unwilling to fail, sometimes publicly, and even catastrophically, you stand very little chance of ever getting rich," Dennis says. "You do not need a great idea to get rich. You do need to able to put ideas into practice. Not giving up is vital." Here Churchill is the author's guide when he said: "If you are going through hell, keep going,"

Be ruthless on costs. "Keep payroll down to an absolute minimum," Dennis says. "Overhead walks on two legs." Every cost and outlay should be scrutinized. "Never buy a business meal if the other side offers to. You can show off later." That applies to other misguided acquisitions too: ''If it flies, floats or fornicates, always rent it. It's cheaper in the long run." (I guess this means he doesn't believe in marriage because of the cost which is a lesson Donald Trump hasn't learned.)

Never allow your self-belief to falter. "Without self-belief nothing can be accomplished," Dennis says. "With it, nothing is impossible." Hire talented people and then delegate as much to them as you possibly can. Cling on to 100 per cent ownership of your ventures: "Ownership is not the most important thing. IT IS THE ONLY THING THAT COUNTS."

But is that they way you want to leave your life?

I think the purpose of life is to evolve spiritually and if you simply do what you LOVE to do and spend a lot of time working on yourself so that you become more and more happy, then you've really found the secret to life.
Becoming rich is not part of the equation as you'll see in the next post.

isn't it interesting how many people spend their entire lives trying to accumulate as much money as possible... often at the expense of hurting a lot of other people. For example, the fast food industry is a trillion dollar industry and it's designed to create addictions which is one reason the tobacco industry is moving into it.

Posted by Van K Tharp at 04:45 PM | Permalink | Comments (5) | TrackBacks (0)

I'm currently doing research on the R-multiples of mistakes people make, but there is a problem. I don't have a lot of data. So here is the challenge. Look over your trades for the last year, especially if you keep them in terms of R-multiples and expectancy like I recommend. Notice when you made mistakes -- where a mistake is not following your written rules. And determine the R-multiple cost of that mistake. And yes it is possible that some mistakes might make you money.... those are the really bad ones that instill bad habits.

Anyway, when you finish, send me your mistake data. And in return, I'll promise to share with you my R-multiple data on mistakes. And this applies to you even if you've never bought any of our products or done any workshops. However, if that's the case, please read all the blogs on Tharp Fundamentals so there you are sure that you understand them.

Posted by Van K Tharp at 06:03 PM | Permalink | Comments (1) | TrackBacks (0)

Do you consider yourself "lucky" or "unlucky" or neither? Well, psychological researchers got two groups of people, a lucky group and an unlucky group. Each group was asked to skim through a magazine and count the number of pictures in a magazine. However, on one page of the magazine, about a third of the way through, one of the pictures had the following printed on it. "Stop counting now there are 67 pictures."

The results were quite interesting. People in the lucky group found the picture and stopped counting. Those in the unlucky group didn't. The results, in my opinion, prove even more how your beliefs shape your experience of reality.

Posted by Van K Tharp at 03:47 PM | Permalink | Comments (4) | TrackBacks (0)

One of my favorite quotes comes from Harry Palmer, the founder of Avatar. Harry makes the following statement.

"You experience what you believe, unless you believe you won't, in which case you don't, which means that you did."

That statement is the essence of understanding my comments below on beliefs and the market. It also is the essence of the statement that you don't trade the markets, you simply trade your beliefs about the market.

Posted by Van K Tharp at 11:24 PM | Permalink | Comments (0) | TrackBacks (0)

All of my comments on the economy and the big picture have to do with my beliefs. Thus, statements such as 1) the U.S. is bankrupt; 2) Gold could climb as high as the Dow Jones Industrials; 3) the dollar could be 35% overvalued right now; 4) a recession is right around the corner, etc. are all MY BELIEFS.

If you don't believe them, then they should have no impact on you except to say, "Van is really out there!" If you do believe them, then then impact they have upon you will depend upon the "meaning you give them" and "the amount of charge (emotional energy) you have on each of them. For example, these beliefs with a lot of charge might be interpreted to mean, "The world as I know it is coming to an end and there's nothing I can do about it. I'm doomed." And then you feel depressed.

However, that's not the way I take it. I look at those beliefs as indicating what could happen and I'm constantly looking for information to prove me wrong (or that the scenario is starting to play out). I also believe that every crisis has within it lots of opportunity...so I'm looking for opportunities to profit. And I also know that some of it is real (i.e., the US has a debt and future obligations of $67 trillion) while other things are just what might happen in the future as a result of that debt. For example, I believe we're in a secular bear market that will last another 10 years, but if valuations (PE ratios) start to move up, then I'll know that I could be worng.

So everything I say is my belief. It's not reality. It's just a filter to reality. And it's meaning for me is the meaning I give it. And the same also holds for you.

Posted by Van K Tharp at 11:11 PM | Permalink | Comments (0) | TrackBacks (0)

Since the end of World War II, there has NEVER been a time when the U.S. economy didn't slide into a recession after we had an inverted yield curve. This is usually defined when 2 year treasuries yield more than 10 year
treasuries. Within a few months the economy usually slides into a recession and by six months, we are usually entrenched in a recession. We should be into the slide right now and into a recession by September or October.

Furthermore, there's another form of inverted yield curve. When Fed rates (currently at 5.25%) are greater than 2 year treasuries (currently at 4.87%) we also have an inverted yield curve. That's been the case since late June.

I know people are predicting that the stock market will go up from here, but given this data, I tend to doubt it. My prediction is that the U.S. government will do its best to cover up any sign of a recession until the November election is over, but after that, expect to see numerous signs of a recession. In fact, I expect that the government will actually start to decrease interest rates early next year, but by that time, you can expect to see the economy really starting to tank.

I could be wrong about all of this, but I simply look at the data and report what I see. It doesn't look that good.

Posted by Van K Tharp at 08:31 PM | Permalink | Comments (0) | TrackBacks (0)

1. The current Secretary of the Treasury was the head of Goldman. He gave up one of the highest paying executive jobs around and own $350 million worth of Goldman Sach's stock. What are the chances of Goldman going under when he is Secretary of the Treasury? Besides, there a many, many ways to participate in Gold besides an ETF.

2."Is the Euro that much stronger than the dollar?"

Posted by Van K Tharp at 09:01 PM | Permalink | Comments (0) | TrackBacks (0)

It hit a bottom of $252 in 1999. It then consolidated for a couple of years before starting a new trend in March of 2001. There was then a nice trendline until August of 2005 until it suddenly accelerated and then it recently became overbought when all of the hedge funds started to climb into gold. Now, the question is whether gold will move down to its basic trendline which would put it just under $500 per ounce or will it move sideways for a while until the trendline catches up. There is no rush to jump into gold. Just be patient.

Incidentally, short term real estate does not look that good because of interest rates. We've had 17 straight Federal Reserve increases which will probably lead to a recession. But long term with inflation being what it is, I would expect a tremendous increase in fundamental real estate prices (i.e., the basic standard U.S. house price).

Posted by Van K Tharp at 10:32 PM | Permalink | Comments (1) | TrackBacks (0)

Long term there is only one defense against the debt picture I've painted earlier and that's is to own "real money" gold and lots of commodity based assets which can be in the form of equities. As many of you may know, I've actually advocated rare stamps as a great solution. Some of you might be thinking that you should diversify out of the dollar. But the reserves of virtually every currency of the world are in U.S. dollars. When the U.S. sneezes, the world catches the cold. The central bank of Italy recently started buying British Pounds and getting rid of dollars. China and Russia are actually starting to increase their gold reserves. Bottom line... I would expect to see an ounce of gold equal to the price of the DOW JONES Industrials within the next ten years, and perhaps much sooner.

Posted by Van K Tharp at 08:32 PM | Permalink | Comments (3) | TrackBacks (0)

The Financial Times, the UK's great economic newspaper, noted last week that the U.S. government maintains two set of books. And the secret set now suggests that the U.S. owes $79 trillion, that's only $12 trillion more than the St. Louis Federal Reserve Report said, when it concluded that the total U.S. debt was $67 trillion. But perhaps the smaller number was a few months old. The times also noted the the president's reported deficit for 2005 was $319 billion, while the "secret" report of the U.S. treasury said it was more like $760 billion. According to U.S.A. Today, the US has lost about $40 trillion over the last 9 years alone, just based upon generally accept accounting principles. To me, deflation is absolutely unacceptable, because the U.S. Debt would be worth more. In fact, Richard Russell, who's been writing a newsletter since the 1950s, says that there is no way the problem can be handled in a sane and honest way." Thus, our government has two choices -- we can avoid paying many of our future debts such as social security and we can inflate that debt so that it is almost worthless. Both scenarios are very bad if you are not prepared.

I think it's quite ironic that we really don't see this reflected in the economy yet. But what happens when it does?

Posted by Van K Tharp at 06:04 PM | Permalink | Comments (1) | TrackBacks (0)

Someone asked a millionaire what his potential was for income. He was 46 years old and had no savings, but he did have $200,000 worth of equity in his house. The millionaire responded: you could be worth $50 million, but what's your commitment? Are you willing to put in 16 hour days for the next 20 years?

I think the same thing is true of trading. The sky is the limit for what you can achieve, but you have to be willing to put in the time. And the time must be spent doing appropriate things. For example, you could probably spend hours each day studying charts, etc. and it probably would have very little effect on your success. But if you are willing to spend a lot of time learning sound principles, working on yourself, developing a great business plan, understanding the big picture, and developing at least three great systems that fit the big picture. Well, if you're willing to do that, then you probably can take millions out of the market.

Posted by Van K Tharp at 04:29 PM | Permalink | Comments (2) | TrackBacks (0)

Even thought we now had a pause in interest rate hikes, stopping after 17, my analysis of the market shows it to be in a clear downtrend. This weekend, I could only find 26 stocks with efficiencies above +10 and 2 with efficiencies above +15. Compare that with 91 stocks with efficiencies below minus 10. Lots of good short candidates.

The market pundits are now saying there is a 70% chance of a recession. And when the U.S. sneezes, the rest of the world seems to catch a cold.

Posted by Van K Tharp at 12:30 AM | Permalink | Comments (0) | TrackBacks (0)

In reply to all of the people that are asking which newsletters I recommend, I would prefer not to go into that at this time because I have done a thorough analysis and comparison and will be putting all of this information in my new version of Trade Your Way to Financial Freedom - due for release at the end of the year. So at that time you will be able to read the whole story - which includes my recommendations and my evaluations - rather than going into a concise version in the blog.

Also I would never want to give out this sort of information without knowing that you understand the basic pricniples of success so that you can follow good advice without shooting yourself in the foot. This information includes continually updating the expectancy, understanding position sizing, and at least understanding the importance of your own psychology. And that information will all be in the new version of the book.

Although most people just want to know, "How can I make a lot of money right now?" -- "What stock should I buy right now?" or "What newsletter should I buy that will give me that advice?" My finding is that the overwhelming majority of people who ask those questions don't know how to follow it. My friend certainly didn't. Even thought I'd given him the recommendation and a copy of the newsletter, he had never subscribed.

Thanks for the interest. Van

Posted by Van K Tharp at 05:07 PM | Permalink | Comments (0) | TrackBacks (0)

My friend sent me an advertisement for silver today, wanting me to read it and then give my opinion on what I thought of their investment. First, if someone is sending you an ad to make an investment, then forget it. All you can generally tell about it is that they have figured out how to make a profit if you invest with them. It probably doesn’t mean anything other than that.

However, my point in writing this blog is that my friend doesn’t appear to have learned a lot of my key principles yet. First, he needs to work on his psychology. To the best of my knowledge, he hasn’t done the Peak Performance Home Study Course yet. Once he really understand himself and his objectives, then he needs to develop a business plan and a method that fits him. That method, if he had one, would help him generate his own investment ideas. To the best of my knowledge he hasn’t done that either.

I knew that my friend had not done either of the things that I recommended above, so I then gave him a good newsletter recommendation. I said that I have evaluated this particular newsletter and I believe it to be one of the best around. Unless you want to come to one of my workshops and learn how to evaluate such newsletter for yourself, I suggested that he simply trust me and subscribe to this newsletter. I then said to be sure to take every trade and not to risk more than one percent of his total portfolio on any trade.

I don’t know whether he followed my advice or not, but the fact that he wanted my opinion about some advertisement for silver suggested that he has not. He wants to consider every trade for himself, but he doesn’t have a method by which to do so. Hmm. Remember my definition of self-sabotage? When you don’t follow your rules, you’ve made a mistake. When you make the same mistakes over and over again it is self sabotage. And if you trade without rules that would also be self-sabotage.

Posted by Van K Tharp at 09:45 PM | Permalink | Comments (2) | TrackBacks (0)

To all of you who have been asking, "how do you buy stocks that are just commodity plays?" my recommendation is do your homework. Here are just a few:

BHP
PD
NEM

Those stocks are basically commodity stocks. Newmont Mining (NEM) is specific to gold, but you can find stocks for many commodities.

Posted by Van K Tharp at 03:29 PM | Permalink | Comments (2) | TrackBacks (0)

August 8 should be an interesting day, because that's when the Fed meets to decide whether or not to continue raising interest rates. Most economic pundits say that we'll get a reprieve because there are clear signs that the economy is slowing. But it's a mixed bag, because inflation is clearly taking off (consumer inflation is now estimated at 5%), while the economy is clearly slowing down rather dramatically. Bill Gross of Pimco is saying that the Federal Reserve will not only stop raising rates, but it will also start lowering them in 2007.

But let's look at this from an international perspective on the Federal Reserve decision. The St. Louis Federal Reserve has basically come up with a report that the United States is bankrupt. The IMF has just stated that
they believe the U.S. dollar is currently 15-35% over valued. Rising interest rates attract money to a currency, but when that stops, watch out.

But there is also something else that is now unprecedented since Bretton Woods in 1944. The central bank of Italy has announced that it no longer trusts the U.S. dollar as a reserve currency. It's cut its dollar holdings down to 63% and buying British pounds instead. And it has not only sold off dollars it was holding but treasury bills as well. If this starts to send a message to other foreign banks, then the implications are profound indeed. Remember when people used to tell you that buying a treasury bill was a "Risk Free" investment. Well, that could begin to change.

I'm not going to suggest what to do, but if you have been reading my weekly email, Tharp's Thoughts, you may have some idea. You'll notice that very little of this seems to make the U.S. press.

Posted by Van K Tharp at 05:37 PM | Permalink | Comments (0) | TrackBacks (0)

Yesterday I was in a poker tournament in which finished 57th out of 900 entrants. My best finish in that tournament is 14th and I am yet to make the final table. Just to put it in perspective, the top 10% of the people in the
tournament make money, so a 57th place finish isn't bad. However, I'd like to win that tournament and to do so I have to walk through a lot of landmines.

I'm big on looking at my mistakes. Mistakes are when I didn't follow my rules. And I also like to look at what I did when I got knocked out of the tournament. Did I make a mistake?

Generally, I won't risk all my chips if two other people are "all in" unless I have a dominant had like Ace Ace. And I generally don't want to go all in until I've seen the flop and I believe that my cards are so good that I seriously doubt if anyone is going to beat me. However, with Ace Ace, you still only have about a 34% chance of winning the pot with nine others against you. With two others against you, it goes up to about 65%.

So let's look at how I got eliminated yesterday. There were 57 people left in the tournament and I ranked about 31. I had about $23,000 in chips and I knew thatI need about $70,000 in chips to survive to the final table. I also had
several people at my table with twice as many chips as I had. So what happened? I looked at my cards and I had Jack Jack. There are only three higher pairs that will beat me and someone went all in before me
with about $15,000 in chips. I decided to call because of the strenth of my hand and because there were only two more people to bet. Also if I lost, I would still have $8000 and I can recover from that. However, one of the two
people behind me also went all in and with $30,000 in chips. I either had to fold the hand (and leave myself with $8000 in chips) or call. I chose to call. However at that point I was violating a rule -- all in against two
people and we hadn't even seen the flop. But this is one of the landmines that you face in no limit power.

To my surprise, I had the best hand. The first person had an Ace - King. Okay, if an Ace or a King comes up (and no Jack), then I'm gone. But the odds are slightly in my favor. The second person had 88. Going all in
against two others was a very stupid play on her part and my Jack Jack had her dominated. I was a 4-1 favorite.

The flop and turn come up (i.e., four cards were now showing) and my pair of Jacks was still in the lead. And then the river came up. Horrors. Its an 8! The player who made the stupid move gets rewarded and takes a pot of $61,000 in chips. Did I make a mistake? No, hands that good don't come up all that often and I needed to make a move to get enough chips to make the final table. Lady luck just wasn't with me.

By the way, if you think I did make a mistake, I love to know your reasoning.

So what does all of this have to do with trading? Trading is quite different. It is never a situation where one person gets all the profits at the end. If this were trading, my mistake would have been colossal. It's like putting all my money at risk on options because I find one stock that is in a fantastic trend. Perhaps you'll be right and make 100% on the trade, but perhaps you'll be wrong and lose everything. You can do that in the market and you need to make sure you never make that sort of mistake again.

Posted by Van K Tharp at 07:35 PM | Permalink | Comments (4) | TrackBacks (0)

Apparently, the St. Louis Federal Reserve is responsible for the timing of the release. The document was finished early this year, but they may have waited until just the right time (i.e., when the media was distracted) to release the document. What better time than when Israel invades Lebanon? What really surprises me is the fact that a lot of investment newsletters have not mentioned the study.

If you'd like to read it for yourself, go to research.stlouisfed.org/publications/review/06/07/Kotlikoff.pdf

Posted by Van K Tharp at 03:18 PM | Permalink | Comments (2) | TrackBacks (0)