Trading with Charts for Absolute Return

NOTHING IS BETTER THAN CORRECT TIMING

The Rothschilds became incredibly wealthy when they knew one day before everybody else in England, including the English government, that Napoleon was defeated at Waterloo on June 18, 1815. They bought every stock they could get their hands on at the London Stock Exchange.

Gerson von Bleichröder, the financier and banker of German chancellor Otto von Bismarck, became incredibly rich when in the 1850s he gave Bismarck money—money that the Prussian government refused to give him—to make war with all the little states in Germany. In return for the money, Bismarck gave Bleichröder political insider information. Bleichröder shared this information with the Rothschilds in Frankfurt, Paris, and London. The internal network among these bankers was supposedly about one week faster than the communication of the governments with each other. Today, this is called illegal insider information, but in those days it was perfectly fine and very profitable.

People such as Henry Ford and J.P. Morgan in the United States and Friedrich Flick and Günther Quandt in Germany accumulated incredible wealth by timing their investments with the right instruments or concepts. They had a great feel for the markets and for products that would develop in the future. How important perfect timing is in the markets can be shown by the stock price of Apple (see Figure 2.1).

FIGURE 2.1 Apple Inc.: EUR/USD: Daily, 2000–2010

Source: www.Fibotrader.com, 2010.

Apple Inc. started ...