Tag Archives: blogging

About This Space…

I might as well say it here, even though it has been on Twitter while I was on vacation. My macroeconomic goodness is moving to The Davian Letter and Minyanville.  So I guess I know who my two readers were: an investment newsletter and a financial infotainment website. Thanks for all the pageviews, guys.

But I don’t want to give up this space. I enjoy using it and I want to see what else can be done. Maybe I’ll turn it into a photoblogging site. Doubt it, though. I mean, I may be the only person on Twitter that actually admits I have mental diarrhea. There’s no way I’m going to comply with a STHU memo that easily. Plus, I fear my mental diarrhea is just getting worse and no amount of mental Maalox or Phillips Milk of Magnesia is going to help.

So I’ll just have to figure out what to do with the space in the meantime…

So stay tuned.

And thanks for stopping by, San Diego…

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Filed under About me, Way Forward

Psychology and Econoblogging

Edward Harrison wrote a really good missive on the nexus of psychology and the econoblogosphere (Confession: I need more coffee before I try to say that again).  Back then, here’s what he said:

Over the past few months, as the evidence of a potential bottoming has grown stronger, I have moved away from the bearish view toward a more bullish stance. Yet, I do get the distinct impression that many commentators in the blogosphere do not share my renewed optimism. Their view is rather dark. Mind you, I am no out-and-out wild eyed bull. Nevertheless, I do think my increasingly upbeat views stand in contrast to most of what you read in the blogosphere about the economy, the market and the banking industry.

via Through a glass darkly: the economy and confirmation bias in the econoblogosphere | Credit Writedowns.

Which was definitely warranted, for a trade.  My concern then, as it is now, was the possibility of sudden disappearances (and more importantly, reappearances) of the liquidity trap door.  Perhaps it wasn’t as justifiable then as it is now, but each of us have different risk profiles.  That’s just a fact.

And when it comes to the stock market, Kevin Depew offers this reminder from a piece in October of last year (emphasis mine):

It’s always good to remember that the stock market is not the economy. Every day I come into the office to find literally dozens of emails complaining that the market is ignoring the relentlessly bearish news flow. But that doesn’t bother me. What will bother me is when we start getting good news. Markets tend to reach exhaustion on good news, not bad.

via How Much Longer Can This Bear Market Rally Last? | Business & Markets | Minyanville.com.

Mood and sentiment.  They drive so many of our actions and reactions, but I don’t think we are always that well attuned to them.  Numbers are meaningless in an environment devoid of context.  Which makes dealing with the issue of confirmation bias so problematic.  Going back to Edward’s post, here’s what he said and my two cents follows:

Here’s my take.  Humans are naturally pre-conditioned to seek confirmatory evidence once they have made a conclusion.

Indeed.  Never let the facts get in the way of your conclusions.

He also offers up this thought, which I think we can all relate to:

Think about this for a second.  When you have bought a car, a house, quit a job, gotten a divorce, taken on a new job, what have you – did you sit around looking for ways to figure out why those decisions were wrong? Unless, you are a masochist or in need of some serious therapy, the answer is no.

Well, maybe I’m a masochist because I do spend some time doing this.  I don’t think I ever have full confidence in my thought process, partially because I’m willing to accept my own limits, partially because of a number of other things.  I don’t obsess over my decisions, but I do look at them and wonder what I could’ve done differently.

Also, because it seems like these days there don’t seem to be any clear-cut decisions.  They just seem to be choices that offer bad and worse outcomes.  And again, each person’s definition of what’s “bad” and what’s “worse” depends on how we define them individually.

So whose right? And whose wrong?  Sadly we’re not going to know the answers to those questions for years to come.  The best we can do is be willing to challenge ourselves.  To do, as the ancient Greeks used to say, “know thyself.”

But make no mistake.  That’s not an event.

That’s a process…

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Filed under About me, finance, macro, Markets, risk management, Way Forward