RonMN wrote:Does anybody else think this or am i over reacting?
It always amazes me how amateurs are able to speak so confidently about future prices when professionals who spend their entire working day living and breathing this stuff don't see it the same way.
halfin wrote:December crude is $58.55 at the moment. If you find the evidence convincing that it will be much higher due to winter shortages, why do you think the other market traders don't find the same evidence persuasive? Do you think they, who have thousands or millions of dollars riding on these bets, have never heard of the prospect of shortages, and that they haven't considered how supply and demand may play out over the time frame of their bet?
It always amazes me how amateurs are able to speak so confidently about future prices when professionals who spend their entire working day living and breathing this stuff don't see it the same way.
bobcousins wrote:Professionals never, ever get anything wrong? Trust me, I've worked with professionals all my life. To stay in business all you need to do is be slightly less worse than your competitors. Where does this ridiculous faith in professionals come from?
halfin wrote:The point is not that professionals are always right. The point is that you, many of you, look at the evidence and find it VERY LIKELY that there will be major shortages this winter that will send prices up. You are basing this not on private information - you aren't personal friends with Saudi royalty, nor do you refine gasoline for a living - but on publicly available information. Yet you find this information very convincing! You think, many of you, that it's almost a foregone conclusion that things will work out this way.
The point of the information from the futures market is that it is based on a consensus of thousands of traders who are spending every waking moment gathering every scrap of information to try to predict prices. They will do anything they can to gain even the slightest edge over their competitors. They have big bucks on the line, their savings, their livelihoods.
So the real point is this: they know everything you do, they have given it more thought and study you have, and they know more as well. And they have derived a very different conclusion than you have. How can you explain that? How can you assume that you are more likely to be right, when people who know more about the issue than you do and who spend more time thinking about it disagree?
Shouldn't that at least cause you to question your degree of conviction about what will happen? Don't you wonder, what do all those futures traders know that I don't? Or do you think you know stuff that they don't??? You're just fooling yourself if so!
halfin wrote:The point is not that professionals are always right. The point is that you, many of you, look at the evidence and find it VERY LIKELY that there will be major shortages this winter that will send prices up. You are basing this not on private information - you aren't personal friends with Saudi royalty, nor do you refine gasoline for a living - but on publicly available information. Yet you find this information very convincing! You think, many of you, that it's almost a foregone conclusion that things will work out this way.
The point of the information from the futures market is that it is based on a consensus of thousands of traders who are spending every waking moment gathering every scrap of information to try to predict prices. They will do anything they can to gain even the slightest edge over their competitors. They have big bucks on the line, their savings, their livelihoods.
So the real point is this: they know everything you do, they have given it more thought and study you have, and they know more as well. And they have derived a very different conclusion than you have. How can you explain that? How can you assume that you are more likely to be right, when people who know more about the issue than you do and who spend more time thinking about it disagree?
Shouldn't that at least cause you to question your degree of conviction about what will happen? Don't you wonder, what do all those futures traders know that I don't? Or do you think you know stuff that they don't??? You're just fooling yourself if so!
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