JasonC

Inflation vs. Strategic Vision

People think that risk has increased because the market is off a lot. Which is pavlov and conditioning, but utterly irrational. The market was extremely risky this time last year. It is dramatically less risky now, because prices are lower.

The PEs available on likely future earnings range from 1.5-2 for the crushed financials, to 4-5 for other unloveds, to 6-10 for high quality companies that haven't done a thing wrong. That hundreds of millions of men think those are "risky" testifies to the power of recent pain to destroy the human mind.

All the talk of early is also irrational, a piece of the illusion that one can own everything when the sign of its recent changes is positive and nothing when that sign is negative. As though anything that just happened must continue to to infinity or zero. Enough, trend following is not thought, it is a dumb mechanical destabilizing force of nature.

Profit from it. The master game starts with "buy low".