The End Is Near Again
The day’s news always seems to redline any current cycle that’s in vogue. A contrarian approach helps keep things in perspective and recognize turning points.
It may well be that we really are herd animals, easily swayed by what seems to be going on around us. The mass media certainly feeds this, with its constant need for the sensational to keep ratings and circulations up. All too often, the ‘experts’ quoted in these stories have the same views as the reporters, a natural affinity that is easy to understand.
All cycles and booms go through the same stages, and share the same characteristics. A pictorial of their activities much resemble waves breaking at the surf line, asymmetrical, with a slow but accelerating growth culminating in a rapid collapse at the front. This has been noted by many people through the ages, with published studies going back to the Tulip craze of the 17th century.
The signs are always there. The increase in TV programs on real estate flipping was a sure sign to move into other investments; now the yammering is on foreclosure assistance, which suggests that the real estate market has corrected itself. It’s time to move into Treasuries when the number of ads on securities investments increases rapidly, highlighted by automated trading programs for Everyman hawked on cable TV. The best way to lead a parade is to know where it will be in the future and be there when it arrives. Like shooting fish in a barrel.
Tags: bubbles, contrarian, creative destruction