Why Do Bears Seem Smarter Than Bulls?

http://www.cnbc.com//id/39651881
Published: Wednesday, 13 Oct 2010 | 11:58 AM ET
By: James Altucher, Managing Director of Formula Capital

I admit it: I’m jealous of Nouriel Roubini aka Dr. Doom. He’s been dead bearish this rally (see our joint CNBC appearance on July 5) and I vaguely recall him being bearish at the market lows in March, 2009. But, to be fair, in August 2006 he was calling for a housing crash as well. So I give him some credit.

But I’m jealous that despite being non-stop bearish over the past 1.5 years since the lows he still gets quoted everywhere, speaks at every conference, has supposedly 1000s of institutional clients paying for his wisdom, and has time for non-stop parties that he will never invite me to. Well, to be fair, he told me he will invite me to one if and when we go into a double-dip recession. But since that is not happening, the likelihood is that I will never go to a Roubini party. Why is he, and every other bear (Howard Ruff, Peter Schiff, etc), quoted everywhere all the time even though in some cases for decades they’ve been dead wrong (see this Howard Ruff quote from 1980 (read the italics)). In fact, perusing the message boards, optimists on the economy are often referred to as idiots and morons even though most metrics for the economy have gone straight up since mid-2009 and the stock market is about 80% higher than it was at the lows.

So why are the bears often seemed smarter or more in tune than the bulls?

1) Laziness. People want justification to not work harder (“if the world is going to hell then why should I bother”).

2) Evolution. People’s brains are hardwired to respond more to signs of danger. Our brains can get fixated, and then addicted, to the negative more than the positive.

3) Fitting in. Because we all have a need to be accepted, liked, and listened to, people are likely to share bad news than good news (because they know that #2 above will get them to be listened to if its bad news).

4) Pattern recognition. Because of #2, people will notice bad events more than positive events as they happen and more easily link those events to the people who “warned them”.

Consequently, people begin to overgeneralize ("we just had a lost decade, so STOCKS ARE BAD").

Two steps to avoid the pessimism:

1) Remind yourself of the evolutionary tendency to latch onto the negative (and then to subsequently overgeneralize)

2) ask yourself what the agenda is of the people making the pessimistic claims.

3) Remind yourself that:

* 1.2 million jobs (net of all job eliminations) have been created in the past 12 months.

* Companies are beginning to spend their record high levels of cash (see point #13 in the link). Intel is buying McAfee in its first cash acquisition of a public company in over a decade, for instance.

* Apple is going to sell 45 million ipads next year

* Dendreon is curing prostate cancer

* Household debt obligations for consumers are back to 1995 levels.

* Google is making cars that drive by themselves

* McDonalds raised its dividend for the 28th year in a row (to 3.25%, significantly above what you would get on government bonds) and theMcRib has less fat than I thought it did.

* Marriott is blowing away earnings and the CEO is seeing no indication of any double dip.

Maybe the Bears get to go to all the parties, but long term the bulls should make money.

孤独

爱因斯坦:“千万记住，所有那些品质高尚的人都是孤独的，而且必然如此，正因为如此，他们才能享受自身环境中那些一尘不染的纯洁”

Warren Buffett on Gold

http://money.cnn.com/2010/10/18/pf/investing/buffett_ben_stein.fortune/index.htm

"Look," he says, with his usual confident laugh. "You could take all the gold that's ever been mined, and it would fill a cube 67 feet in each direction. For what that's worth at current gold prices, you could buy all -- not some -- all of the farmland in the United States. Plus, you could buy 10 Exxon Mobils, plus have $1 trillion of walking-around money. Or you could have a big cube of metal. Which would you take? Which is going to produce more value?"

Okay, so gold is not a screaming buy to Buffett. What should a typical upper-middle-class person in the U.S. buy to prepare for retirement?

"Equities," Buffett answers without a moment's hesitation.

流血的婚姻（六）美女的权利 from RunTao Yan

可悲的是，在新婚之即，鲜有新郎新娘懂得：婚姻在这个五彩缤纷的世界里最具斑斓，绝不象围城“进去的人都想出来，城外的人都想进去”那么公式般简单。婚姻是社会的产物，它用一根上千年来公用的绳子把两人的身体距离拉近为零达到能互相交换体温的紧密程度，然而两颗心的距离永远都不会是零。两颗心之间的距离如同两个突起的山头，近在咫尺能互相挡风避雨，其实真要贴在一起，双方都要付出难以承受的代价来填平中间的沟壑。非但如此，它需要在时间上双方同时倾斜才能软着陆。悲惨的是一方山头独自倾斜而栽进了悬崖粉身碎骨，也把另一方的山头损伤，对方还不领情。

新娘听说新郎秉性耿直为人豪爽，江湖义气第一桩，便对他有极高的期望值。新郎知道新娘美貌绝伦，善解人意，便理所当然地认为她必是一位有三从四德温顺可爱的贤妻良母。夫妻二人都以为自己这一生的幸福自然而然地从天而降，就跟雨水落下来时那样天然自得，那样不让人操劳费心。

Funny quotes from RunTao Yan

PHD - 屁爱吃涕
狮屎胜于熊便
挨踢(IT)专家们也没人研究出阳间与阴间信息交流的软件

More quotes

Even the Spanish flu was a big plus for the survivors.
- Charles Munger

A clever person solves a problem. A wise person avoids it.
-Albert Einstein (1879-1955)

All man's miseries derive from not being able to sit quietly in a room alone.
- Blaise Pascal June 19, 1623 – August 19, 1662

The key to everything is patience. You get the chicken by hatching the egg, not by smashing it.
- Arnold Glasgow

Academic politics are so vicious precisely because the stakes are so small.