People love fear! Like you said, it's in our DNA. Imagine you're in the savannah thousands of years ago. You see something - it kind of looks like a tiger. If you assume a tiger, and it turns out to be a rock, no big deal. If you assume it's a rock and it turns out to be a tiger - well, you're lunch and a genetic dead end.
I think this drives a lot of the irrational investing behavior we see. Investments start to drop, so to be safe, we sell. When prices start to go up, the memory of the fear is fresh, so we need to make sure it's safe to get back in. When they get high enough, we buy back in. Data proves over and over we sell low and buy high.
Totally agree with your point that most people would do best with an allocation that gives up some return potential for reduced volatility.
This is so fascinating. I was just listening to a personal finance podcast where the person didn't think he needed to save for retirement because the world is gonna end before then. It's so bizarre how a highly intelligent person can get wrapped up in such doom and gloom.
Sure, doom sells, that's quite obvious. However, first, it doesn't take a great deal of discernment to separate out those types from serious analysts. Second, there are times of doom, and this is clearly one of those for anyone with reasonable objective intelligence who looks closely at the macro situation extant. I learned in the army that in a hierarchical structure like we have in the global society, leadership sets the tone and determines the outcome . Weak leadership brings destruction unless replaced. What can be expected from todays leadership? (Biden, Trudeau, Netanyahu, Macron, Scholz, Britains no name, etc) and those puppet controller 'elites' behind them? An important note is that quantum physics has proven that the 'what' and the 'when' cannot be known at the same time. So for example, I know that all fiat currency systems inevitably collapse (due to compound interest) but I can't know when! Debts are borrowing from the future, and large debts require big growth to pay back. This is a major challenge as the debt itself is anti growth due to compound interest. Monetization of the debt (CB 'printing') creates and feeds the INFLATION monster, which destroys society through rising rates. BTW, all Cb's are privately owned, including the Fed, by said 'elites'. All those within society at all levels are debt slaves, and are lost unless society can find a path to Good. Human society (matrix) sits on a foundation of TRUST, and all the many stressors are eroding it. No advanced society can survive without a TRUSTED currency that holds its value. Just a matter of the 'WHEN', baby.
People love fear! Like you said, it's in our DNA. Imagine you're in the savannah thousands of years ago. You see something - it kind of looks like a tiger. If you assume a tiger, and it turns out to be a rock, no big deal. If you assume it's a rock and it turns out to be a tiger - well, you're lunch and a genetic dead end.
I think this drives a lot of the irrational investing behavior we see. Investments start to drop, so to be safe, we sell. When prices start to go up, the memory of the fear is fresh, so we need to make sure it's safe to get back in. When they get high enough, we buy back in. Data proves over and over we sell low and buy high.
Totally agree with your point that most people would do best with an allocation that gives up some return potential for reduced volatility.
This is so fascinating. I was just listening to a personal finance podcast where the person didn't think he needed to save for retirement because the world is gonna end before then. It's so bizarre how a highly intelligent person can get wrapped up in such doom and gloom.
Dalio has been predicting a 1929 style crash since at least 1980
Sure, doom sells, that's quite obvious. However, first, it doesn't take a great deal of discernment to separate out those types from serious analysts. Second, there are times of doom, and this is clearly one of those for anyone with reasonable objective intelligence who looks closely at the macro situation extant. I learned in the army that in a hierarchical structure like we have in the global society, leadership sets the tone and determines the outcome . Weak leadership brings destruction unless replaced. What can be expected from todays leadership? (Biden, Trudeau, Netanyahu, Macron, Scholz, Britains no name, etc) and those puppet controller 'elites' behind them? An important note is that quantum physics has proven that the 'what' and the 'when' cannot be known at the same time. So for example, I know that all fiat currency systems inevitably collapse (due to compound interest) but I can't know when! Debts are borrowing from the future, and large debts require big growth to pay back. This is a major challenge as the debt itself is anti growth due to compound interest. Monetization of the debt (CB 'printing') creates and feeds the INFLATION monster, which destroys society through rising rates. BTW, all Cb's are privately owned, including the Fed, by said 'elites'. All those within society at all levels are debt slaves, and are lost unless society can find a path to Good. Human society (matrix) sits on a foundation of TRUST, and all the many stressors are eroding it. No advanced society can survive without a TRUSTED currency that holds its value. Just a matter of the 'WHEN', baby.
In God and Gold I Trust