Lately, I have been hear an interesting type of argument. It is a form of debate that is both disingenuous and dishonest. We will call this the “Can’t Lose Argument,” or CLA. Worse than confirmation bias, it is a money-losing exercise in narcissism.
The CLA goes something like this: A data point will be mentioned, and no matter what the net change in that data — up, down or neutral — it is somehow bad for markets. Stocks, bonds, commodities, real estate, all are fair game for the CLA.
Let me share a few examples of it:
CLA: “This quarter, corporate earnings are going to be weak. Perhaps even a negative growth number. That proves a recession is close.”
The Rational Person, or RP for short, notes that analysts forecast higher profits.
CLA: “Well, maybe not negative, but soft — worse than last year in the same quarter.”
Then earnings exceed forecasts.