Tuesday, August 12, 2008

Markets/Economists/Investors/Rants

I try not to go on to much about markets... Cause if I go on about cyclical secular and seasonal cycles... and Inflation... it would make your eyes water.... it does mine.

I coined a Phrase... Which is that most investors need to take a Costanza Position when investing.... What ever you want to do..... You probably should do the opposite.

Want to buy the top of Yahoo in 2000?
Want to buy Oil stock in the past 3 months?

Problem is... by the time you should look to buy oil investments... you will be too scared to do it.

Emotion rules the day in investment....Things Bottom, Because of the Fear.

Like they say "buy when there is blood in the streets"

The blood has yet to run in Oil, or in Real estate..... But it will.

For the past 6 months, some Oil Wrangler in Nigeria could stub a toe, and oil would go up $2. But the fact that this Russian thing is barely moving the needle in oil... Says something.... Something like OIL IS GOING MUCH LOWER.

At the time I'm typing this oil is down $2.

It's the way markets work..... YOU CANT AFFORD $4.00 oil... People only make $10 an hour pluss benefits.. so spending the first hour of work earning enough money to drive to and from home..... Well.... IT KILLS THE ECONOMY... and with it Oil prices. People will walk, buy bikes, public transport.... etc....

THIS IS THE MOST BASIC LESSON IN ECONOMICS.

It blows my mind that all the Economists, and Analysts... etc never seem to understand the dynamics of markets. And constantly model things based on Static forces, and not dynamic forces.... Problem is... that makes it much harder to model....

SO... No oil at $200.

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