Posts filed under “Really, really bad calls”

Once Again, the Gold Narrative Fails

Will they never learn?

Yesterday, oil rallied 4.3 percent and gold gained 3.6 percent as commodities had an up day after a long and painful fall. The fascinating aspect of the trading wasn’t the $45 pop in gold, nor the even greater percentage rally in oil, but the accompanying narrative. (As of this writing, each has giving up about half of those gains).

When it comes to speculating, especially in precious metals, it is all about storytelling. Over the years, I have tried to remind investors of the dangers of the narrative form (See this, this and this). Following a storyline is a recipe for losing money.

Why? The spoken word emerged eons ago and narration was a convenient way to pass along information from person to person, generation to generation. Your DNA is coded to love a good yarn of heroes and villains and conflicts to resolve, preferably in a way that is both exciting and memorable.

However, your genetic makeup wasn’t created with the risks and rewards of capital markets in mind. When it comes to being suckers for storytelling, I have been especially critical of the gold bugs. Since 2011, the gold narrative has been a money loser, the secular bull market for the metal clearly over.

However, gold often provides a plethora of teachable moments. I want to point out several recent gold narratives that have been dangerous to investors.

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Category: Cognitive Foibles, Gold & Precious Metals, Psychology, Really, really bad calls

My “Annual Temper Tantrum”

Dig this: “In an email to The Huffington Post, an NRF spokeswoman called Ritholtz’s piece an “annual temper tantrum” that was “slanted, flawed and predictable,” and compared it to “such holiday traditions as the Grinch and the threat of coal in one’s stocking.” The NRF did not cite any inaccuracies in Ritholtz’s column, nor did…Read More

Category: Data Analysis, Really, really bad calls, Retail

Muni Mania: A Timeline

Source: Bloomberg Briefs

Category: Credit, Fixed Income/Interest Rates, Markets, Really, really bad calls

No, Black Friday Sales Were Not Down 11%

The New York Times headline declared, “Thanksgiving Weekend Sales, at Stores and Online, Slide 11 Percent.” Not to be outdone, the Wall Street Journal reported, “‘Black Friday’ Fades as Weekend Retail Sales Sink.” And — to prove I’m not playing favorites — Bloomberg News noted that, “Black Friday Fizzles With Consumers as Sales Tumble 11%.”…Read More

Category: Data Analysis, Really, really bad calls, Retail

Tracking Inside Info in ‘Fight Club’ Ring

From Bloomberg Graphics: Nine people were convicted for trading on inside tips about Dell and two other tech firms, including five who were part of a group dubbed the “Fight Club.”* Three of those convictions are on appeal. A Dell insider named in those trials, Rob Ray, wasn’t charged and denies wrongdoing. Source: Bloomberg Graphics

Category: Digital Media, Legal, Really, really bad calls, Trading

Don’t Shop on Thanksgiving and Other Good Advice

This is the time of year when Americans gather with family and friends to give thanks. A bounteous feast is the time to express gratitude for our good fortune. We count our blessings, humbled by the fortuity of our circumstances, grateful for whatever it is we have. Once you get that over with, it’s time…Read More

Category: Consumer Spending, Data Analysis, Really, really bad calls, Retail

Stop Making Intellectually Disingenuous Market Arguments

The quality of our discourse is decaying. This was once a standard complaint about the tone and depth of our national political debate. Now it has spilled into the financial realm. Shall we blame Twitter, trolls or bloggers? I am unsure of the underlying reason. But as we have seen far too, financial discussions seem…Read More

Category: Apprenticed Investor, Cognitive Foibles, Financial Press, Really, really bad calls, Weblogs

Falling apart: America’s neglected infrastructure (60 Minutes)

Falling apart: America’s neglected infrastructure

Source: 60 Minutes

More videos after jump
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Category: Really, really bad calls, Taxes and Policy, Video

Why is the United States in a Constant State of Emergency?

click for full article Source: WonkBlog

Category: Digital Media, Politics, Really, really bad calls

Your Brain Can’t Handle Green on the Screen

We have said a good deal in this space about the futility of trying to time short-term market moves (see e.g., this, this and this). No one has demonstrated the ability to do this consistently over time. While it is possible to avoid the very largest of collapses over long periods of time using a…Read More

Category: Cognitive Foibles, Psychology, Really, really bad calls