John,
Earlie and Mike M both covered this, but thanks for the clarification on the facts. That's why I think a reasoned (though vigorous <g>) debate is so helpful. First, we may have our facts wrong, either because we're sloppy, or we make a simple mistake. Second, all of us are working off of mental models of the market and the economy, of varying levels of complexity and sophistication. But they're all abstractions of the underlying reality.
Someone asked me the other day how bearish I was. My response was that I am probablistically bearish, as opposed to deterministically. Deterministically would be there's a mechanical response to current conditions - a significant bear market is inevitable, and likely soon due to a variety of technical and fundamental factors. Probabilistically bearish means that I recognize there are a variety of possible scenarios, each with associated probabilities. So, the art form if you feel this way, is to be able to identify said scenarios, weight their probabilities, and try to identify leading indicators that would tell you which way things are likely to go as things unfold. With all that said, I'm profoundly bearish.
So wrap up this long note on a simple point <g>, this is why I find debate on points, and divergent views, so helpful. Both in identifying and evaluating scenarios, and also to help compensate for bias in my perceptual screening. When I'm bearish, I tend to look for and over-weight data that supports my outlook, and I do the same when I'm bullish. Of course, even screening for bias in my outlook, I think the facts indicate that sooner or later, probably sooner, we're looking at a hard down, possibly one with horrific consequences.
Peter |
