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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: shades who wrote (62606)	6/3/2006 3:33:55 PM
From: bond_bubble	Read Replies (2) \| Respond to of 110194

Well Shades, I believe, in investing, you choose some strategy. Your strategy covers everything under the planet - And you believe that diversification should be a safe bet. This diversification works when the liquidity flows everywhere. Sorta, all boats are lifted by the rising tide. But, I think diversification strategy is going to fail when the liquidity trap is hit. In a liquidity trap, even a innocent bystander is hit. That is why liquidity traps are dangerous!! The investment strategy has to be focussed in a liquidity trap. I understand that you are not attaching high probability for this liquidty trap. In your opinion, chances of other things happening are higher. Hence your diversification strategy will work if liquidity trap does NOT happen. I believe that there will be liquidity trap and hence I'm going to be narrowly focussed. Credit deflation will happen is my strategy. In your opinion, that will NOT happen or it has a remote chance. Hence, your are going for the diversification strategy. We will have wait and watch. I dont think you or I can be correct until after things happen.