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CHAPTER 5 - For Every Insider There Is an Outsider > SOYBEAN SOLILOQUY
SOYBEAN SOLILOQUY
Let’s take one more look at these amusing phenomena of the public doing the wrong thing at the wrong time, like lemmings running into the sea. This time the sea is a weekly chart of soybeans (Figure 5.4). I have marked off the extreme highs where the small speculators were buying, and the extreme lows where they were selling.
In the fall of 2003 the public shied away from soybeans with the most bearish view, the least buying, since 1999. Despite the uptrend in beans, they were persistent in their unwillingness to enter the long side of this market. Too bad for them, as this market began a skyrocketing move with the potential to turn every $1,000 you plunked down into $27,000.
As a general rule of life, I have learned that whatever the masses do, most of the time it is the wrong thing to do. The majority is just that: the majority. The majority is not right in most instances. Look no further than the White House, our government of the majority, or the tax codes for further proof.