Trading Greenspan, Part I
Federal
Reserve Chairman Alan Greenspan is perceived as an enigma, a man whose message
is cloaked behind a wall of obtuse language. The markets spend an inordinate amount of time trying to break down that
wall, hoping they might at last find the Holy Grail on Greenspanisms. But for most, understanding Greenspan to the point where both he and
the Fed are even semi-predictable, and hence, tradable, is an elusive challenge.
Greenspan is therefore seen as a distraction to investors who would
rather focus on companies and industry fundamentals than monetary policy.
But Greenspan’s influence is too powerful to be ignored, so
investors must labor over his every word.
Is
Greenspan, in fact, unhittable—