A Trader's Lament

 | Aug 02, 2012 | 1:40 PM EDT
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It is interesting to consider that after all the meetings and announcements from Europe the last couple of years, nothing much has changed. They have not solved any of their basic problems and the only thing that seems to have occurred is that Greece, Spain and Italy are even closer to the brink of disaster.

Like most traders, I'm tired of the constant news-driven action that temporarily moves the market randomly but changes nothing. It has turned the whole notion of prudent speculation into a game of chance where luck beats skill.

We occasionally have periods when we revert to good old-fashioned stock picking, but they haven't lasted long and we eventually return to the intense focus on macro matters. Unfortunately, one of the consequences is that it has driven away the casual individual trader. We seldom see the sort of joyful reaction to a strong market that was so common before the crash of 2008.

In the years that I have been a full-time trader, there have been many periods where the market was challenging and offered little edge. I was always confident that if I stayed patient, conditions would change and the nature of trading would revert to something more positive.

This time I'm more worried than ever that a structural change is taking place, and when you consider additional issues like the Knight Capital (KCG) debacle and the worst economic recovery in our lifetimes, you know we will have to be extremely tough and patient while we wait for change to occur.

One of the positive things I see is that there are many willing to declare "the death of equities," just like the infamous BusinessWeek cover story in 1979. Bond guru Bill Gross is the latest to declare the market dead.

I constantly remind myself that if the market was easy, it would not be so potentially lucrative. I'm confident that the nature of the market will shift again and if we keep plugging along, we will be rewarded. However, days like today will always be with us.

I've been doing a little dip buying of Smith & Wesson (SWHC) today, but I continue to lie low and wait for better odds.

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