The New Playing Field in Stocks

The investment landscape has changed dramatically since the early 1980's. Those who are unable to adapt to the changes will fail. Those who understand the changes will profit handsomely.

The years since 1990 have been characterized by market behavior heretofore unknown. Since the mid 1990's the stock market has become so significantly speculative that it's behavior is more like that of a futures market than an equities market. New issues can increase in value several hundred percent or more on their first day of trading. Frenzy and foolishness characterize today's markets. Insanity appears to be spreading, yet few investors believe or even realize that a speculative bubble has developed. And it could be the most serious bubble since the Dutch Tulip Mania of the1600's.

We have seen Internet and technology stocks soar while many old line, investment grade stocks have deteriorated and lost the their investment appeal. Recent changes in the component stocks of the Dow Jones 30 Industrials reflect a growing trend toward new and aggressive marketing and away from the conservative management and business methods of the past.

Death of Simplicity
Whereas investing was once a relatively simple matter, it has become highly complex, ever more risky and significantly competitive. The individual trader of today is forced to do battle with an army of professional traders, money managers, day-traders, banks, and other financial institutions. In short, what was once a relatively safe and reasonably predictable investment world has become an investment jungle where survival of the fittest rules. Although the game can still be played profitably, new methods have replaced the effete tools and techniques that have been used so effectively for many decades. Winning at the game is difficult, but with the right tools profits are possible.

Cataclysm?
Still, some investors and market analysts would disagree with my assessment. Their concerns are more serious than ours. They are convinced that the world of investing has become a veritable Tower of Babel, destined to self destruct. Their forecasts are dark and foreboding. They foresee an inevitable and unavoidable market collapse. And they claim that the moment of truth is nearly upon us.

In this fatalistic view of stocks, the individual investor can only achieve full protection by exiting the financial arena, withdrawing all funds from banks, maintaining a full cash position - but NOT in U.S. dollars since, in the opinion of "gloom and doomers" the US dollar is also likely to be destroyed in the much vaunted financial cataclysm. "Head for the hinterlands" they warn us, for "the sky is falling".

Dr. Pangloss Reborn
Still another extreme faction preaches unabashed optimism. Just as Dr. Pangloss of Voltaire's Candide claimed that all "is best in the best of all possible worlds" there is yet the view (held by many) that the US stock market is headed ever higher in an endless march to Nirvana. Recent books tout the Dow at 40,000....50,000...and even 100,000. Yet history clearly teaches that such unfettered optimism is typical and predictable at or near significant market tops. Hence, forecasts of eternal multiple market orgasm must also be ignored or, at the very minimum taken with a few pounds of salt.

Not your Great Grandmothers Market
Making money in stocks was once achieved the "good ole fashioned way". Armed with stock charts (usually drawn by hand), a few timing or trend indicators, earnings reports, and general knowledge of industry groups, the investor of days past studied investment candidates. Earnings were analyzed, trends were discerned, charts were evaluated, and time was taken before a commitment was made. Yes, it's true that there were risk takers and speculators, however, the majority of investors were level-headed and interested in picking solid stocks with growth potential and dividends - stocks that would be held for the long run.

But once traders tasted the honey of speculation in the early 1900's, things changed forever. Since the speculative stock bubble of 1929 there have been several euphoric market tops, each characterized by a subsequent severe decline. Speculation in all sectors of the financial markets is here to stay. And it is more prevalent today than ever before. The tools that were developed in yesterday's markets, no longer serve their purpose today. Today's market victors are armed with computers, specialized analytical programs, massive historical data bases, immediate access to market information, and virtually instant order execution bolstered by historically low commissions. No, this is not your grandmothers stock market! This is a game that "takes no prisoners".

Reality of the Food Chain
The market monkeys at 2Chimps.com feel that a return to sanity is long overdue. We know that survival in today's investment jungle is unlikely without tools, techniques and forward thinking.

We also understand that no matter how brilliant, savvy, educated, skilled or prescient you may be, the market will always find a way to outsmart you. The market has unlimited ability to trick you, fool you, make you insecure, haughty, anxious, depressed, euphoric, rational and irrational, yet... The reality of life in the investment jungle is the cold reality of the food chain.

Whether you call it economic Darwinism, financial immorality, or the battle for financial superiority the fact remains that the winners in today's markets are neither the rodents nor the lions. In the investment jungle, rodents and other small beasts live in eternal fear at the bottom of the food chain. Lions, former "kings of the jungle" who once sat on the throne of the food chain are slowly becoming extinct, having been unable to adapt to changing conditions. Elephants are easy targets for poachers, sharpshooters, tusk collectors, and trophy hunters. But the ultra-fast wildebeest survives. The quick-witted monkey swings from tree to tree, far above the fray, surviving on its big picture view of the battlefield below.

Chimp Rebellion
You may argue that monkeys and the great apes are endangered species as well. You will point to the near extinction of the chimpanzee and other simians. And we would be the first to agree. Yet we retort that a new era has dawned...two renegade chimps have escaped from their circus captors. Rather than perpetuate the hear no evil, see no evil, speak no evil stereotype, our motto is to hear it, see it, and speak it.

The chimp rebellion begins now. Our credo and commitment to you (and us) appears below. Take our words seriously. Join us in our protected perch high up in the trees where the air is clear and the vision is virtually unrestricted. Share our view of the insanity that reigns below. Survive and prosper as those less fortunate and less skilled fight their war of attrition.

Our Goals and Credo at 2Chimps.com are to:
* Provide you with a RATIONAL view of the investment scene
* Give you SOLID intermediate and long term recommendations
* ALERT you to developing and/or upcoming trends
* Highlight PROFIT making opportunities in a variety of stock groups
* FOREWARN you of potential changes in major economic trends
* Direct you to solid stocks in EMERGING areas
* Analyze and evaluate trading SOFTWARE that can give you the competitive edge, and
* Help you SPOTprofitable opportunities while PROTECTING your assets

Join us and share in the knowledge. Subscribe to 2Chimps.com today.

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Elliott and Jacob Bernstein
Chief Chimps