Josh calls out those who have dug their heels in and fought the tape the whole way up. Are these folks part of your daily media diet?
“Some people need to reflect back on what they’ve been doing for the last 8,000 points. Others need to reconsider whom they’ve been listening to and what they’ve been reading all this time. Have their influencers gotten things mostly right or mostly wrong? Have they been focused on the bigger issues or missing the forest due to over-examination of each tree?
Nobody gets everything right, but small errors in judgment and minor course corrections are preferable to a complete and total inability to wake up. I know that hindsight makes everything seem obvious and this market has been anything but simple the entire way up…
If you’ve been listening to people who’ve not grasped this concept for the last few thousand points, ask yourself what you plan to do about it? What new choices will you make about the things you’ll pay attention to in the future?”
The people who have been consistently forecasting the future (as opposed to analyzing the present) have, not surprisingly been getting it wrong. What is surprising is their lack of error correction method. We expect to be wrong, have built in a recognition and admission process that prevents us from staying wrong.
This is not to suggest the world is hunky dory and there is nothing to be concerned about. However, there is an issue with those who philosophically cannot wrap their heads around equity markets going up. I am not suggesting that you need to be sanguine all the time — but your methodology has to be more than cherry picking the worst headlines and positioning your portfolio for the next crash, year after year.
There are plenty of things to be concerned about — but there always are. The recession porn crowd’s constant warning of impending doom has not exactly been adding value to your media diet — or your portfolio.
Instead, try watching inputs and data instead of headlines. Consider signals like the A/D line, equity valuations and trend. I find that is a more productive use of my time than indulging in recession port and fighting the tape the whole way up.
As we have discussed repeatedly, what you read and who you listen to can have a significant impact on your net wealth.
Choose your Yodas wisely.
Q&A: The Price of Paying Attention (November 3rd, 2012)