A Losing Bet: The End of the World

If you are reading this, it means that the end of the world, previously scheduled for 1994 Saturday night, did not occur.

Why anyone pays attention to these dang fools is one of the more annoying vestiges of the 2007-09 recession and market collapse. The rise of the cranks is a classic example of the Recency effect, an after the fact, 20/20 hindsight, rear view look at the world.

Not just the eejit End-of-Worlders who have been with us since the beginning of time. There have also been a slew of broken watch pundits who have enjoyed an undeserved credibility following the crisis.

Who are these Doom & Gloomers? They include:

• Crisis rock stars;

• Goldbrickers who missed the equity rally;

• Thinly veiled partisans;

• Hyper-inflationistas;

• Conspiracy theorists!

• Austerians;

• Analysts trying to turn one good call into a new business model;

• One sided web sites that never see anything positive;

• Specialists in Recession Porn;

I don’t have to name names — you can do that if you want. I am compelled to point out that this crowd not only is enjoying undeserved credibility, they are NOT making their followers money. Listening to their advice, their readership missed the greatest market rally in 4 generations, but they piled into commodities in time for a major collapse, got frightened out of munis that have no credit issue or default threat, and have otherwise missed opportunities and lost capital.

I have never been a perma-bull — not only because its money-losing to be one-sided, but also because throughout most of my career, equities have been over-priced.

The bottom line is simple this: You best understand the motivations, track record, and credibility of the people you choose to read before you allocate any capital based upon it.

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