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December 07, 2008

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David

Thank you, Kent.

I think there is some much needed perspective here, and very relevant for me personally now.

Ned

Interesting. I appreciated the quotes.

Just to offer a totally different perspective:

History is repeating itself and we know exactly where it is going.
What we discover is not something new, but rather a clarification of what we already know.

The clarification leads to insight. And the insight leads to a transcendence of the cycle.

That insight, from what I gather, it to not get attached to positive or negative events and just go with the flow.

Kent @ The Financial Philosopher

Ned:

I like your philosophy of "going with the flow," which may be considered "non-being," and I try my best to live that way.

Non-being is something we should all practice more often...

"Resistance to the unpleasant situation is the root of suffering." ~ Ram Dass

"Tension is who you think you should be. Relaxation is who you are." ~ Chinese Proverb

Oz

http://www.charlierose.com/view/interview/9713
http://www.fooledbyrandomness.com/

Nassim Nicholas Taleb talks a lot about uncertainty and the huge role it plays in the world. He calls them black swans, ever heard of this guy?

Kent @ The Financial Philosopher

Oz:

I've not read Taleb but I do know of his "black swan" theory.

Just because one has never seen a black swan does not mean that they do not exist.

Our brains prefer heuristics, which is to say that humans like to find patterns upon which the future can be predicted.

Unfortunately, our brain's wiring makes us terrible investors.

In context of the current economic and market environment, our brains will tell us that the market will continue to fall because the downward direction is the current and most recent pattern. For this reason, I am more apt to believe that markets will rise sooner than most think.

In other words, I try to use my mind more than I use my brain!

Thanks for the comment. It's great to hear from you again...

Oz

i'm still of the mind that models can be useful for prediction, but only if used selectively based on the information given and with an awareness of its limits. it seems clear that wasn't the case this time around.

i like your contrarian thinking, although can you elaborate why you believe things may be turning up? is it simply because everybody else ha reached a consensus that we're going lower? if that is the case, wouldn't being a contrarian still be driven by everyone else's thinking and not based on independent analysis? from what i've read, signs point down for the next year or two.

Kent @ The Financial Philosopher

Oz:

I share your belief that models and quantitative data may be used selectively for prudent analysis, and I practice this analysis both personally and professionally in my investment firm.

In terms of contrarian thinking, in my usage of it, I believe that "the crowd" or investor herd is "right" most of the time but not all the time.

The points at which the crowd is wrong are marked by extreme emotion, which I would more specifically define as "blind optimism" or "blind pessimism."

The media also perpetuates this blindness by choosing the sensational headlines, rather than those of rational perspective. For example the big headline last week was "Worst Job Losses in 34 Years." This headline is accurate only by the number of job losses, but when measured by percentage it ranks at a modest 41st in historical rank.

Certainly, the ecomomy has broad weakness with several pockets of extreme weakness that will persist for months and, in some cases, for years or even a generation; however, my non-scientific deduction is that things are not as bad as most believe them to be and perhaps a bit worse than a small majority believe them to be.

When I honestly review my inner thoughts, feelings and perspective, I will admit that I am a person who simply chooses to see the silver lining in the clouds; however, I am a logical and curious thinker, which has served my well as an investor and a money manager... most, but not all, of the time...

As always, Oz, thanks for sharing your thoughts and for provoking mine...

I believe you may have inspired my next post!

Cheers...

Tom Volkar / Delightful Work

Good read, my natural default position is optimism but I'm not blinded by anything. I just believe more in the ability of the individual to build their own destiny. I coach those making the leap to self-employment and I'm having my best last quarter ever. I do feel the hope from Obama's victory and can't help feel as though the prevailing good sense will have a trickle down affect.

Kent @ The Financial Philosopher

Tom:

I, too, am a "default optimist" that believes in "the ability of the individual to build their own destiny."

With regard to the Obama presidency, I believe it symbolizes the power of hope in the face of uncertainty. Once people are given the opportunity to place an unpleasant and recent past behind them; they are given the capacity to move forward. Hope does this...

jordan retro 1

Lying disguises our mortality, our inadequacies, our fears and anxieties, our loneliness in the midst of the crowd. We yearn for the comfort of familiar lies to create a more amenable reality.What do you think?

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