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Subject:  Merry Christmas and a Happy New Year Date:  12/15/2012  5:51 AM
Author:  kenmegsmith Number:  158791 of 158904

Hi All,

It’s been a strange old year for me, for some reason I seemed to have lost my mojo. Perhaps those close to me departing this world had an effect. Then all of a sudden it came back with a vengeance. I now seem to figure out things in milliseconds whereas I before I couldn’t. Its great operating back at warp speed. I have even come across folks that move as fast as me, if not faster. Instead of retiring from business I have started new business adventures.

At last I will make a start on completing the building work to my small trading floor. Something I have been working on for too many years. Should be up and running by June/July 2013. One consolation is that technology is a lot cheaper than it was in 2000.

As to trading, my intra-day trading focus is options on SPY, plenty of liquidity in options and the underlying. Not as easy to manipulate by funds.

American trading software and direct access trading is still the finest in the world.

There are a few funds out there employing the best Oxford/Cambridge PhD rocket scientists they can get to create their own computer generated trading system. They can make a lot of money and are difficult to spot in the market. I wouldn’t say I was competing against them. It’s more a sort of keeping out of their way which isn’t easy. Now and again I get caught on the wrong side of them and have to stop out as fast as I can. I think of these trading systems as artificially intelligent robots. Being neither kind nor unkind to human traders.

Old fear and greed still exists now as it did in Jesse Livermore’s time. Plenty of greedy people in this world to make the volatility I want.

There are still rouge traders out there creating havoc with institutions funds. I think of Nick Leeson as number one rouge trader. I sometimes wonder what would have happened if he had been short instead of long. I tried to buy Nick Leesons Trading Jacket but £21k was a bit much and Paul Taylor beat me to it. Perhaps the Gulf state of Qatar has slightly more funds than I to buy such things.

Merry Christmas and a Happy New Year

Ken Smith
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