Market Anthropology: Humbled

Sunday, May 8, 2011


I awoke Saturday morning as I typically do – tired and wondering why one of my lovely beasts (my Aunt’s affectionate term for children) had startled me from what is informally scheduled as, “Daddy’s catch up time.” The usual suspect was my four year old daughter who has been known to get a spell of the early morning munchies or even a spontaneous desire to watch old Michael Jackson videos on YouTube (older brothers…). 

So I rose, stumbled out of bed and walked downstairs with her. She helped me pour two bowls of cereal and washed a few spring strawberries. She was pleased that she had succeeded, quite effortlessly mind you, in receiving prompt delivery of her early morning requests.

In the meantime, I thought I might catch an early start to the typical morning reading ritual. Coffee in hand, I proceeded to where I usually begin – at Alan Abelson’s Up and Down Wall Street column in Barron’s.  

He simply is the best. 

Creative and dizzyingly articulate in all corners of the market and the world, I have been reading his column’s since I developed an interest in the financial markets many years ago.  

I had sent him some of my work the previous week and was delighted when he returned the email. 

Needless to say, I was not expecting the honor he bestowed on me in mentioning Market Anthropology and my silver short in this week’s column:

AS A POSTSCRIPT TO THE ABOVE, we’d like to offer congrats to Erik Swarts, whose very existence had eluded us until the receipt of a cheerful e-mail from him last week. Erik runs a site called Market Anthropology and he was kind enough to send us some of the stuff he has posted, which we found extraordinarily literate, informed and sensible (a trio of qualities rarely in evidence among Street bloggers or, for that matter, investment analysts). Intrigued, we responded with a few relevant queries.
What really piqued our interest and inspires the kudos is the great coup he pulled off shorting silver. He’s had misgivings about the metal for a spell now but on April 28, with the metal flirting with $50 an ounce he predicted it would slide to “$32 in the not too distant future.” Man, was he ever right.
Erik took the best route to Wall Street — a circuitous one. He confesses to “have always been fascinated by the market as an expression of many things,” but had reservations about the less savory participants (don’t we all?). He was a geologist for, as he puts it, “the better part of my career in the geotechnical and environmental engineering field” and moonlighted building and renovating homes. Erik began trading on his own full-time half a dozen or so years ago.
He describes himself as a “perspective trader” and emphatically not a scalper or day trader. He relies, he explains, on his technical background, logic and keeping close tabs on the market’s psychology and fundamental underpinnings. He started the site, he relates, “because I enjoy writing and expressing my ideas in a creative fashion.”
Erik claims he’s bullish on equities for the long run (so are we, but we can’t help invoke the reminder by one of history’s great speculators, John Maynard Keynes, that “in the long run we’re all dead”). However, he cautions that last week’s action in the stock market “was a shot across the bow just as the action the previous Tuesday was a shot across silver’s bow.”

And he finds it “more than a little disturbing” that the price action in silver is eerily retracing the stock market’s movement in 2008. “I believe,” he concludes drily, “the equity markets had a bad second half — no?”” Hi-Yo Silver, Alan Abelson

Thank you Alan for the very kind words. Humbled would certainly be an understatement.