What's the difference between the stock market and Lamalera villagers? Market participants are anonymous while the men must hunt together repeatedly to ensure survival. It's obvious there is no incentive for anonymous players to cooperate; if anything, there is great incentive to fuck everyone else over, which leads us to the conclusion about the world in its current state.
There is good reason to believe the poisoned Kool-Aid will continue to be passed around. Many thanks to member Tom for sending in this one, along with an astute observation, “Here is a link to a piece on some interesting new research about how facts fail to change people’s opinions. It’s specifically about political opinions, but I would argue that it applies pretty equally to how many people deal with the markets.”
Yes, the America of 50 years ago is gone, but so is the America of 200 years ago. Demography is driving trends; more young people than ever are urbanized. Who is going to do the revolting? Not anyone shopping at the mall.
We are navigating shark-infested water. To survive, we must remain independent thinkers. We cannot drink Kool-Aid prepared by Jim Jones. We have to reject the mushroom treatment, refuse to be kept in the dark and fed shit. Every time someone says something we must ask: Why are they saying this? What’s in it for them?
After reading The Knowledge Base, new member Ken asked the following questions about the model investment portfolios.
I originally published this article on May 16, 2010. There is still no “explanation” for the Flash Crash, no more than there is one for the Bermuda Triangle, so we’ll chalk it up to a big stampede by the herd until proven otherwise.
The sovereign is a coin first struck in the year 1489 by the Royal Mint. Because “the obverse design depicted the King enthroned in regal splendour”, it became known as the sovereign, as in the monarch. In modern times, the word is understood to refer to The Queen. Of England. Not Greek bonds. The key to the definition of the word is “not controlled by outside forces.” And so it is for corporations.
What does all this have to do with the market, you ask? As I see it, there is reality and our perception of reality. The guy who sees the situation closest to what it really is has the best chance of taking the appropriate action. Excessive optimism and pessimism leads to wrong actions. Freaking out is counterproductive.
