Outsiders Sometimes Know Best

After posting my last article, I decided to go back in history to locate some information that I thought would be pertinent for this particular moment in time. I decided to do so because I felt very strongly that it would be important to provide readers with certain reminders, especially given that: “Those who cannot remember the past are condemned to repeat it.”

When I was growing-up, my father would often tell me that it was important to listen to people even if I did not hold their advice or opinions in high regard. He would tell me that much perspective could be gained from listening to people, even if they were not considered to be experts on a given subject. Ironically (or, maybe, not so ironically), over the years I have found that some of the smartest people I have ever come to know are those who are not “experts,” or pundits — or those who are very well educated. A case-in-point is Dr. Michael Burry who is featured in the following 60 Minutes story. Though Dr. Burry is very well educated, he was not considered to be an expert in the investment world — that is, not until he made millions of dollars betting against the subprime housing market.

60 Minutes: Inside The Collapse, March 14, 2010

Source: 60 Minutes

The link to 60 Minute’s Web site is worth clicking given that it will take the reader to Part 2 of the interview with Michael Lewis, and to additional videos with Dr. Burry.

It is Important to remember how and why the stock market collapsed in 2000 and again in 2007, because, if we do not remember the reasons for such events, we a destined to repeat our mistakes.

Though the S&P 500 is currently at an all-time-high; and, though the housing market is “hot” again; and, tough hiring is up, we still have problems underpinning our return to nirvana. Investors, especially retirees, have been forced into riskier assets (e.g. stocks) because of the Fed’s Quantitatively Erasing Rates of Interest Priority Over Fiscal Fairness, or QERIPOFF program (thus, the reason for the stock market rally).

With regard to housing, people are creatures of habit, which may account for much of the new mini housing market bubble that appears to be forming. And, with regard to jobs, the jobs that many people have been finding lately are of the part-time, lower paying and with no benefits variety. So, don’t be lead astray.

Please don’t take the, so called, experts opinions and advice as gospel. Though most of them are not out take advantage of their readers and listeners, many of them are too narrowly focused to see the clouds through the fog. Sometimes, it is simply best to listen to your instincts, and to pay attention to the things going on in the world around you, rather than relying on expert advice.

Disclaimer: The content on this site is provided for general educational and informational purposes only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author and do not necessarily represent the opinions of sponsors or firms affiliated with the author. Any action taken by you as a result of information, analysis, or advertisement provided on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

VN:F [1.9.22_1171]
Rating: 0.0/10 (0 votes cast)
VN:F [1.9.22_1171]
Rating: 0 (from 0 votes)
This entry was posted in Articles, Commentary and tagged , , , . Bookmark the permalink. Trackbacks are closed, but you can post a comment.
  • StatCounter

    wordpress blog stats

Check Out What’s New at The Tenacious Trader by Going Here