Joseph L. Shaefer

Nouriel Roubini, One on One: More Doom and Gloom

The Economists' Rule to avoid ever 'fessing up to being wrong is: "Tell 'em what or tell 'em when, but never tell 'em both."

Dr. Roubini has built a fine business following this rule, as have Robert Prechter, Mark Skousen, Howard Ruff, and scores of others in the past. "What's going to happen?" "There will be a terrible decline." "When?" "Sometime in the future." "How do you protect yourself? Gold, commodities, equities, debt?" "No. None of those will work?" "What then?" "Stay liquid."

It happens that Dr. Roubini and I agree that this thing has come too far, too fast. Where we differ is that I refuse to cower in a hole somewhere eating trail mix and muttering, "I told you so," so I will allocate to the assets and purchase the sectors I've been writing about, all the time enjoying the party, but taking some profits along the way so I don't have a lot of baggage as I quietly edge toward the exits.

In the real world, I need to make a reasonable return for my clients and myself no matter what I THINK the markets or the economy are going to do. Being rich, or at least protecting assets and making a reasonable return in all types of markets, is more important to those of us in the real world than being right!