Thursday, October 09, 2008

Peace Out Everybody

Question: How many economists does it take to construct an accurate forecast?

Answer:  Nobody knows.  There's too few data points.

Not being a very modern guy, I'm not really sure what "Peace Out..." means, but that's how Tri-Daughter #4 signed off as she left for the airport on Monday and if it's good enough for the Vertical Man family it's good enough for y'all, especially as it seems the entire world's gone crazy.

Exactly one year ago, the Dow hit an all-time high.  At the time it seemed it could never go lower.  If you believed that you were stupid and wrong.   Today, with markets one-third lower and volatile as hell, it seems as if they'll never go higher. If you believe that, you're no smarter and still wrong.  

A few months ago, oil prices were near $150/barrel and heading toward $200...if you believed the forecasts.  Lots of impressively-credentialed experts made lots of impressive-sounding 'sky's the limit' arguments backed with impressive PowerPoint decks.  Now oil's below $90 and worried OPEC dillwads are sucking tailpipe exhaust. No big surprise.  Analysis by PowerPoint paralysis is usually nothing more than mental masturbation and always a poor substitute for an intelligent strategy.

And ya gotta chuckle as Wall Street craves - indeed, begs for - help from the Fed, Treasury, Congress...anybody.  When help shows up, those very same tycoons of industry yell "Holy Shit!  The government's helping!  Things are worse than we thought!  The sky IS falling!  Sell, sell, sell!"  Such goofy behavior must be a sign either of a market bottom or advanced dementia.

IMHO, we're close to an historic buying opportunity, where American industry's uber-brand names (e.g. GE, IBM, Morgan Stanley) are gonna be available for prices that'll look damn fine in your retirement account 10 years from now.  I can't tell you exactly when to buy, give you a price target or any sort of a guarantee. Despite a degree in economics, I'm neither an economist nor a licensed investment representative, and my advice may be worth exactly what you're paying for it.

But it feels like one time I told my boss that I wasn't nearly as smart as he thought I was when times were good, and not nearly as dumb as he thought when times were tough. Regardless, don't EVER bet against me, I told him.  Unlike others, he didn't. History's dustbin is littered with the skeletons of people who bet against America and American industry and American know-how and plain 'ol American willingness to kick ass when ass needs kicking.  They lost those bets and they'll lose this one too.  So Peace Out.  

And stop watching the evening news.  All you'll get there is soundbite and ratings-driven hysteria.  It's what sells.  Accuracy after the fact doesn't sell.  Nor does self-confidence nor reasoned arguments nor careful analysis.  And nobody's making you buy the fear and hysteria they're selling except you.  The winners in business (as in life) are those who hate the warm fuzzy feeling of being part of a herd - the ones who know it's always warmest and fuzziest just before the herd runs off a cliff.

In my industry, it's called the "Modern Healthcare" syndrome.  As in... 

Q: What will hospital XYZ's "strategy" be a year from now?  

A: Whatever's on the cover of this week's Modern Healthcare magazine.  

And all the while they talk about "separating" from the herd, doing things differently and better, getting different and better results.  Um-hum. It's a powerful thing, that herd, a comfortable thing...until you and those around you all die together.

Screw the herd.  Time to buy.  And answer my poll over there =====>

1 comment:

Spokane Al said...

I agree. When we go to the supermarket for tuna fish, and find out it is on sale, we don't head for the exits to wait until the sale is over. And the market? - its all tuna fish!