Wednesday, February 28, 2007

Clueless on Wall Street

Ever since my days as a financial journalist, I've derived occasional mild amusement from authoritative statements about what's going to happen in the markets. The truth is nobody knows and, repeatedly, experts have shown themselves as ignorant as anybody else. So, following yesterday's steep fall, it was good to read the words of Bob Parker, deputy chairman of Credit Suisse Asset Management. 'This,' he announced, 'is going to be more than just a one-day event and could go on for a few weeks. But it's not the start of a one-year bear market trend.' The wonderful exactness of his words makes this a particularly fine example of the genre. My own advice, based on extensive research and very deep thought, is vaguer but more resonant: be afraid, be very afraid. This is, in fact, always good advice about anything.

9 comments:

  1. What an utterly insane system humanity is enslaved to. Absolutely nothing but the fluctuations of numbers occurs in stock market crsahes, and yet catastrophic results arise from this nothing happening. No crops fail, no fleets of ships wrecked in storms- just numbers going up or down.

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  2. Bad logic and bad advice.

    Uncertainty implies equal probabilities of good and bad outcomes. Fear is only appropriate if you are certain about a bad outcome, which makes you subject to the same criticsm you level at Mr Parker, being certain about something you cannot be.

    Get your Hitchhiker's Guide and repeat after me: Don't Panic.

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  3. Markets are only insane in the way any mob of people are, riven by greed, fear and the possiblity that someone else has a better view. To be fair to pundits, there are predictable elements - recessions end, booms crash, companies grow and decline. It's all just an endless repeat enlivened with new fads and faces.

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  4. If you want to understand the stock market, I think it is better to study psychology rather than finance.

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  5. well my predicitions on my fantasitc blog are always right.

    I reserve all rights to contradict myself at anytime; after all I aspire to be an economist.

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  6. Is that you or me speaking, Unslicker?

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  8. I am unexpectedly indebted to you, Unslicker.

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