Investors have been riding a volatility roller coaster of late. Two weeks ago the Dow plummeted more than 15 percent, the biggest weekly decline since the Depression. Last week the Dow soared 7.4 percent or 611 points, the second biggest weekly point increase in its history.
Such wild swings put one in mind of a poem by Robert Herrick, "Delights in Disorder." Herrick, who died in 1674, naturally didn’t know a thing about calls, puts, electronic trading, hamster warrants, or any other mechanism that moves modern markets. But he clearly recognized the opportunities that may turn up when cherished old rules no longer seem to apply. The following market version of Herrick’s verse, "Profit From Chaos," appears in my Songs of Wall Street book. To see reviews of this book and ordering information, just hit this link: Reviews
Profit From Chaos
When markets are a real mess
Big bucks are made with recklessness;
As spreads that once were small get large
It lets you practice arbitrage;
An options play, a put or call
Becomes a sudden cash windfall;
A trade on margin, oft awry
Is suddenly a genius buy;
A silly tip, you should ignore
Brings home the capital gains galore;
A deal all thought had surely died
With nifty payoffs is revived;
In chaos, not in markets steady,
You make the biggest profits heady.
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