"Before the beginning of brilliance, there must be great chaos. Before a brilliant person begins something great, they must look foolish in the crowd." -- From the I Ching, traditionally viewed as written by Fu Hsi nearly 5000 years ago...
This quote was from my post of January 24, 2007, Nary Quite Contrary, which noted an excessively rosy view for the prospects of stocks in 2007. From a contrarian view, this had simultaneously suggested that prudent investors should consider taking "baby steps" away from "the crowd," which was inching toward euphoria over stocks...
This edition of Weekend Wisdom will spotlight, not predictions, forecasting, or self-congratulatory premonitions, but a retrospective reflection of how common sense and wisdom can guide our thoughts and behaviors...
Now lets see how well philosophy guided us in 2007...
"He who is greedy is always in want." ~ Horace
This was one of the key quotes from the post of January 3, 2007, 2500 Years of Philosophy for Financial Success in 2007, where I suggested to "never underestimate the American consumer," to "take advantage of this by investing in stocks" but to "proceed with caution" in 2007...
"Don't let your special character and values, the secret that you know and no one else does, the truth -- don't let that get swallowed up by the great chewing complacency." ~ Aesop 
The post of, March 22, 2007, The Storm of Irrational Exuberance, noted the existence of complacency, which is one of the destructive emotions for investors:
"Time breeds complacency in the minds of fools: Eventually, the same human flaws will lure us into believing that 'everything is OK' just before things turn for the worse."
"There is no calamity greater than lavish desires. There is no greater guilt than discontent. And there is no greater disaster than greed." ~ Lau-tzu
The post of June 22, 2007, Weekend Wisdom: The Cycle of Greed, illustrated the predatory lending that preyed upon the "lavish desires" of wishful home buyers that was packaged into complex financial structures, revealed later in 2007, and resold to eagerly awaiting hedge funds and unwary investors... In the post, I observed:
"power is often created and destroyed by the same force. The current market cycle is no exception to that observation."
"It is easier to exclude harmful passions than to rule them, and to deny them admittance than to control them after they have been admitted. ~ Seneca
This quote was from the September 11, 2007, post, When Emotion Comes Knocking. Here's an excerpt:
"Emotions will continue to compete with our reason. Emotion is not necessarily an enemy -- after all it provides some of the greatest pleasure in life. Just be aware that unchecked passions can have a devastating effect. If you know yourself intimately, you will know not to open the door when the most dangerous of emotions come knocking..."
"True mastery can be gained by letting things go their own way. It can't be gained by interfering." ~ Lao-tzu
The post, of September 18, 2007, That Was Ben, This is Tao, brings us to where
we are today: The continued unfolding of the housing and credit crises, dragging down the economy, as the Fed fruitlessly attempts to "interfere" with the same strategies that created the debacle...
In closing, you may notice that the majority of my posts, from September forward, shifted from market-related commentary and "noise" to behavioral finance, self-awareness, and self-improvement...
Stay tuned for philosophy in 2008 that should prove to keep us mentally and financially sound through the "noise" of another year...
Have an enjoyable weekend and beginning of your new week...
TFPAuthor, Kent N. Thune, QPFC, is the President and founder of Atlantic Capital Investments, LLC (ACI), a 'fee-only' Registered Investment Advisory firm located in Mount Pleasant, SC.
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