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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (6557)	11/3/2002 8:19:03 PM
From: Wyätt Gwyön	Respond to of 306849

Reverse of today, the bulls used to taunt the non-moderated bear threads where the LT participants had been wiped out good point. i think it is mainly luck that determines who survives. however, what is luck from one perspective seems to be skill from another. getting the timing and the direction both right can only happen for a small minority. if they become deluded into thinking their success is due to their own genius, then they will continue to wager heavily until they blow up. what Nassim Taleb calls being "fooled by randomness". we humans operate on very short time scales mentally, but some of the changes we are anticipating or not anticipating will take years, even decades, to play out.* so there is a lot of wiggle room wherein we can establish and justify different belief systems, at least temporarily--as long as we back away from them before they stop working. but if one is to take a static position, such as "long-term buy and hold", then the timing is really critical. (just as a simple example, you hear people say that the market should earn at least 9% a year for the next decade to match the worst patterns of the past 77 years, but you never hear anybody say that 10-yr trailing returns have gone negative in every serious bear market, and current 10-yr trailing returns stand at about 9%--leaving a lot of potential space on the downside.) i think there is a lot of propaganda that timing does not matter in the "long run". but keynes knew what happened in the long run. * that is why, even though i am a bear, i do not make heavy bearish bets (such as being 50% short or 100% short the market). there is no guarantee that my liquidity would last long enough even if my conviction is borne out by events in the world. rather than having an active posture (heavily shorting the market), i thus prefer a defensive posture (heavily cash and short-term bonds). with a few wagers on the side.