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Chicago Mercantile Exchange!

November 23, 2009

I bought CME shares for $164 this year. The price today is $324! I made 197% profit in less than a year! There is no guarantee that if you purchase my books on the psychology of investing you would make that kind of money. Finding the money tree in the Wall Street jungle is a function of passion and commitment to Behavioral Economics, the understanding of human behavior in the market place.

If you feel passion for my next statement, as great as you would feel passion for a beautiful naked woman next to you in bed (or man), nurture your commitment to investing:  CME cornered the Derivative market, the queen of the crops. A buyer and a seller get together for a sumptuous lunch in Wall Street. They discuss and sign a contract to buy or sell a specified commodity at the ‘floating’ market price on a future date. Isn’t that like a sophisticated poker game? The one who masters how the psychology of the other will play out with the cards in the immediate future (commodities) – wins!

The psychology of Options is a bit more complicated. The buyer and the seller go to lunch to discuss a contract where the seller gives the buyer, for a fee, the right to buy a commodity at an agreed upon price before the expiration date of the derivative option contract. That deal can happen only if the two individuals estimate differently the supply and demand of the commodity in the future, which is based not only on economics and the weather, buy heavily on the traders personalities – who is an Options Optimist.

The beauty of investing in Futures and Options is that I let CME do all the work. All I do is evaluate the behavioral economics of CME before I buy their shares!

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