Posted February 14, 2012 at 3:40 am
by Ben Steverman
Only the gloomiest of Wall Street’s prognosticators got it right in 2008 and 2009. Since then, their pessimism has been infectious.
On almost any investing topic — from emerging markets to U.S. stocks, from commodities to sovereign debt — there are respected experts predicting the worst.
So far, apocalypse hasn’t arrived. The U.S. economy shows signs of life. Europe is muddling through its debt concerns. The economies of China and India have slowed but not stalled.
If these commentators, who range from short-seller Jim Chanos to GMO’s Jeremy Grantham, prove prescient — and Bloomberg.com will check in later this year to see if they are — the biggest surprise in 2012 would be some truly good news. [Continue to slideshow]…
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Editor’s Note: For the WV’s take on self-styled prophets-of-peril, read our posts about prognosticating, starting with:
Posted May 11, 2011 at 5:52 pm
by Barry Goss
What do you get when you mix a childhood fantasy to be a Ninja, a voracious investment researcher, and the founder of a research group that trains traders across the United States who have a desire to acheive leveraged returns?
None other than a gentleman who is the Chief Investment Officer of a Northern California wealth management firm, and strongly barrels through all the prognosticating “destruction of the dollar” and “death of America” noise to give sensible, grounded, level-headed advice to very (and, I do mean ‘very’) wealthy families.
Tim, who I introduced you to via yesterday’s post, Why you should be ‘okay’ with holding cash in dollars, might have taken up cage fighting if not following the path of a money manager, as his passion for Martial Arts has lasted most of his life (for years, he has studied Kenpo Karate, Judo, Tae-Kwon Do and most recently Brazilian Jiu-Jitsu).
His experinece and study of fighting arts, especially as it syncs up with an expansive awareness of seeing the grey areas of life, is what probably has made it easy for him to to write another hotly-debated article.
What could he have written that stirred up so much backlash, emotional criticism, and downright feeble responses from those who are determined to latch on to constant fear and worry?
Simply that if you’re going to put opportunistic financial and investing decisions on hold due to a desire to feed your own political ideology (i.e., that the coercion of government or other higher sinister forces will soon collapse the dollar), you’ll be left behind.
To sync up with my key point in yesterday’s post, here’s Tim talking about why the dollar isn’t heading six feet under any time soon:
People who are neck deep in debt are in the mode of either giving up their assets in which the debt was secured, walking away from debt that is not secured through bankruptcy, or slowing spending in order to pay down the debt. As the age of deleveraging continues to take hold, the demand for the currency in which debt is repaid will always be there. If you need proof, just take a look at the Japanese Yen since the age of deleveraging was forced upon those people.
The dollar is not going anywhere, anytime soon, as long as the government can continue to require that you pay taxes in dollars, and have the guns to put you in jail if you don’t give it to them. If the government, for example, started requiring taxes to be paid in hibiscus flowers, you can bet the value of the U.S. Dollar would plummet and the value of hibiscus flowers would skyrocket. Hibiscus flower seed companies would be the new banks, and businesses would only accept payment of goods and services in seeds or hibiscus flowers.
It is the reason that gold is a store of wealth, but not actually a currency, as I have been wrong to assume myself. In general, you still can’t buy most goods with a one ounce gold coin. You can’t pay taxes with a gold coin. All one can do is decide to sell the gold coin for dollars, and then use those dollars to buy most goods and pay taxes. So even the gold bugs of the world who call for the collapse of the dollar will always need to be ready to convert those coins into dollars, thus creating an underlying demand for the currency they so despise.
This comment will usually draw out the “every fiat currency in history has failed” remarks, or “the U.S. Dollar has lost 96% of it’s purchasing power since the Fed was created” line. Don’t forget to look past the smoke and mirrors of those comments to realize that it also takes much less work to buy those products. The 96% less comment makes the reader think that we have to some how work 25 times longer to purchase that same item.
For Tim’s full commentary, see his The End of America? Not Quite post at Seeking Alpha.
But, before you do, remember something about human nature:
It loathes striving for anything that requires an element of self-accountable and personally-responsible effort. In the fight between justifying its limiting patterns and meager existence versus making changes in beliefs, habits, and execution that could (and would) bring about grander accomplishement, the former contestant will always win.
The crowd loves to accentuate fear… fear that more times than not is rifled with misinformed paranoia, political ideology, and an interest in focusing on things they can’t control (yup, it’s easy to escape a self-responsible and independent action-equals-consequences life that way).
For more info about how the mutually-inclusive relationship between Mind and Money, see our High-Yield Wealth – From the Inside-Out section inside the Wealth Vault…
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Posted April 11, 2011 at 8:41 pm
It’s somebody who spends a majority of their time and energy reveling in the so-called pending doom, and prognosticating “destruction of the dollar” and “death of America” noise perpetuated by overzealous marketers and ivory-tower financial types.
As pointed out by Brad, via this letter, we’re not saying to ignore government meddling and over-regulating, anti-success actions.
What we are saying, however, is that if you let the pessimism over-shadow your psyche, and continually fear what may one day happen, you’ll always have your money in ‘lock down’ or ‘preservation’ mode.
Our core philosophy around here goes something like this: the more we attempt to think we know about the direction of any market, including riding any seemingly easy ideological bandwagon (like the coming demise of the world’s super-power, or the value of any particular fiat currency, or generally looking with conviction into any flawed crystal ball), the less we end up earning nice ROIs.
For example: while it DOES seem incredibly purposeful and idealistic to talk about how paper assets (think certain ETFs) just recycle, move around useless money, or are the tools for the political/Wall-Street cartel, keep something in mind:
You can take such worst case scenarios and shun away such flexible and profitable IVs (due to non-guaranteed outcomes, driven via fear), or you can allow your digital (fiat, backed by nothing) currency to go to work for you.
‘Cause, in the end, it (digital investable cash) is still the FOUNDATIONAL vehicle to grow nothing into something. And, when you get more somethings, you then can take them and buy real assets with them.
For more, read “Why you should be ‘okay’ with holding cash in dollars.”
Posted December 18, 2010 at 4:55 am
Preface by Barry Goss:
In the same vein that caused me to write about keeping your gold bugs in check (see article here), another fellow wise renegade thinker advises to…
Ignore old men writing newsletters!
As Joshua M. Brown points out in his 3 Things You Can Ignore From Now On article, you can either keep focusing your head and your actions around the perilous, prognosticating things in the future — the disastrous consequences that must one day seemingly occur — or you can GROW small amounts of money into BIGGER amounts NOW.
Which do you choose?
Excerpt from his article:
“There’s a tiny company called Vibram making ‘five finger shoes’ that make it look and feel like you’re barefoot. They did $11 million in sales in 2009, in 2010 they’ll finish with more than $50 million and in 2011 someone in your family will be walking around in them. To buy these shoes, the kids will find the money that all those dour old men told you doesn’t exist.
“Old men writing newsletters about ‘battening down the hatches’ and ‘the New Normal’ hear about something called Groupon being worth $5 billion and automatically assume ‘Bubble’ because the company doesn’t assemble aircraft carriers — they can’t wrap their heads around the hundreds of millions in cash flow being generated by a web-based startup with almost no employees, physical real estate or equipment.
“Mohamed El-Erian probably made over 500 TV and radio appearances in 2010; not once did he tell you about Redbox ($CSTR). Or Netflix ($NFLX) or IMAX ($IMAX). Or Ugg Boots ($DECK) becoming a perma-brand like Nike. Or Green Mountain Coffee ($GMCR) becoming the new Folgers.
“Not once did he mention the fact that fashion and entertainment defy the business cycle and that teens will find a way to spend on new stuff — even against a backdrop of 21% unemployment for their age group.”
To learn how we turn little amounts of money into BIGGER amounts, click here…