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« Housing Supply and Demand | Main | Weighing the Week Ahead: A Decision on Health Legislation »

March 10, 2010

Comments

oldprof

Roman -- How right you are! Thought, less thought.....

That seems to be the mantra.

Thanks for the chuckle.

Jeff

anonymous

The technical term for what you're talking about is Confirmation bias.

The Accrued Interest blog (now discontinued) had a post in 2006 in a similar vein: Lawyers vs. Detectives.

Count me firmly in the doom and gloom camp, by the way, but that's a topic for another post. We shall see, indeed.

tom brakke

An orientation to the exploration of ideas and the willingness to change your mind are critical tools for investors, as you indicate.

One complication is the notion of time horizon. Perma-bears and perma-bulls are equally worthless, but it's important to be able to assess the situation in advance of the crowd and stand it against it for some period of time if need be. (Again, in either direction.)

Right now, the perspective of time has shrunk so much that if you are "wrong" for a few days, you are "wrong" period. Figuring out how to arbitrage the immediacy of now versus the odds of the future may be the most needed skill of all in modern markets.

Roman

What are you doing Jeff??

Stop it. Stop with this "thinking" idea.

We are all going to hell in a handbasket because of Obama and his death panel health care plan. And I will refuse to acknowledge anything else that doesn't confirm this viewpoint.
*******************SARCASM OFF************************

Sadly, this is the viewpoint of at least 30% of the American public and in my opinion this political climate is the biggest financial risk in the medium and long term.

In the short term (5-10 years), we are pretty safe in stocks. But in the medium term (10-25 yrs) and especially in the long term, we are screwed because there will not be any political will to do what is necessary to solve America's problems.

oldprof

Mike C -- Thanks, and thanks for the link.

Jeff

nemo

This may be true...but if the medium for exchange becomes worthless...

Mike C

Good post. Here is an interview with Montier that hits on similar points and themes:

http://www.simoleonsense.com/part-2-interview-with-james-montier-%E2%80%93-the-little-book-of-behavioral-investing-%E2%80%93-how-not-to-be-your-own-worst-enemy/

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