I’ve added Podcast #92 to the “RobCasts” section of the site. It’s called The Market Has a Brain — That’s Why Whatever You Decide to Do Turns Out to be Wrong.
Investors often joke that stocks are sure to go down soon after they make a big purchase. There’s a reason why things often turn out that way. The market really does in a sense have a brain that helps it know how to do the opposite of what most of us are expecting.
Evidence Based Investing says
I like the article you linked to in “Todays Passion”
This extract at the end is great.
The bottom line: The problem isn’t with the markets. They’re behaving in a wild, chaotic, unpredictable manner—just like they always have.
Rather, we’re the problem. We need to find a way to live with the markets’ chaos, so we hang tough at times like this and have a shot at earning those healthy gains that can accrue to long-term investors. And that’s why we all need someone—whether it’s our financial adviser, our mother-in-law or our friendly neighborhood columnist—who will constantly remind us of the financial basics and cajole us into sticking with the program.
Remember how, in 1,009 columns, I told you to consider risk, diversify globally, keep costs low, buy index funds, rebalance regularly and save diligently? Now, let me tell you again.
John Walter Russell says
Jonathan Clements:
The bottom line: The problem isn’t with the markets. They’re behaving in a wild, chaotic, unpredictable manner—just like they always have.
That is EXACTLY the problem. Refusing to think. Just hold on tight to failed theories. The market is highly predictable in many respects.
We saw this market coming a long time ago.
Have fun.
John Walter Russell
Rob says
Thank you both for sharing your thoughts.
I agree that the column by Jonathan Clements (“I’m Not Apologizing”) is an important column. I haven’t made a decision but I am giving some consideration to the idea of recording a podcast that would address the matters raised by it in some depth and then forwarding a link to the podcast to Jonathan to see if he would be willing to listen to it and perhaps provide us his reaction. Jonathan was kind enough at an earlier time to respond to some e-mails that I wrote to him re the safe withdrawal rate matter (I asked that he warn people about the errors contained in the FIRECalc calculator, a calculator constructed by my friend Bill Sholar, the former owner of the Early Retirement Forum.
Rob
DRiP Guy says
“I asked [via email] that [Clements] warn people about the errors contained in the FIRECalc calculator [by Bill Sholar]…”
And what happened Rob?
I think we can guess.
Same as with the FBI, right?
Same as with the FTC?
Same as with the EFF?
Same as with the ACLU?
Same as Kitces?
Same as Bogle?
Same as Lindauer?
Same as Purcelleville PD?
etc?
Everyone that you send your haranguing emails to eventually gives you the cold (but perhaps polite) shoulder, and ends with a ‘thanks, but no thanks’ wave off.
Did you ever wonder why that is?
DRiP Guy
Rob says
Everyone that you send your haranguing emails to eventually gives you the cold (but perhaps polite) shoulder, and ends with a ‘thanks, but no thanks’ wave off.
I take issue with the word “haranguing,” Drip Guy. Other than that, I think that what you are saying here is not too terribly far from the mark. I think that Jonathan was kind to respond to my e-mails. He certainly was polite. But it is true that he did not write a column about the dangers of the FIRECalc calculator, which is the action step that I was seeking from him.
Did you ever wonder why that is?
All the time. I bet that about half of the podcasts I have recorded explore some aspect of this question. It’s probably the most important question facing us today, in my assessment.
Rob