CHight
May 11, 2009
Controlling one's animal instincts in a dynamic investment environment is difficult to say the least. The smartest managers put controls in place to help prevent them from themselves. I think Keynes quote that that investment decisions "can only be the result of animal spirits — a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities" is a perfect example of why markets are inefficient and investors that can make more rational decisions than their competitors will excel. Many firms are starting to put constructs around their investment process to control these debilitating factors (www.alphatheory.com).
jbzoom
Apr 30, 2009
"This is a lot of populist pap."
Er, no - the populist nonsense is to compare the US economy after 9/11 - which was over-leveraged but not irredeemably (but was pushed into disastrous debt over the following six years) - with the situation in 2008 when a decade of unfettered borrowing (mass greed) and Wall Street lunacy (elite greed) drove the economy into a brick wall.
A Historian
Apr 29, 2009
This is a lot of populist pap. You don't need to go that far back in history to understand things. Look at the difference between 2001 (after 9/11 when the economy literally stopped) and 2008 (after TARP when the economy literally stopped). In the first case the nation, led by the President, came together. In the latter case, the nation, led by the President, went into panic. 'nuf said.
