#85 In hindsight we all need umbrellas

There is no better time than Christmas to look back and reflect. Given the spectacular market recovery, the gifts under the tree will no doubt have recovered. As has confidence on Wall Street, where "God's Work" is paying off profitably. In hindsight, not the wisest of comments by the CEO of Goldman Sachs (need I mention any names?).

Christmas is a time for humility and reflection, if not to ask forgiveness for those we have neglected inadvertently (tax payers anyone?). Obama was elected partially to give that message to the "fat cats" of Wall Street. Despite his television appearance, a generic hallmark Christmas card probably made more of an impression.

Instead of focusing on banker's bonuses, the real focus should be on the economy. Markets are supposed to reflect the barometer of the economy, with economic weather men telling the masses wether we are in for rain or sunshine. Whether it be sun or rain, umbrellas seem to be in short supply. But then again who needs an umbrella when you can rely on the weather forecast. After all, the representatives of God's work are always right in hindsight. And yet in hindsight we all needed umbrellas.

Many claim they saw storms coming. Why did we all go outside without an umbrella then? I've got one now, but I am tempted to trade it in for sunglasses with the market looking so upbeat. No need to stay indoors. Take a little gamble, the masters of the universe sell on NBC & Bloomberg; buy gold, time for value investing, just look at those juicy p/e ratios, etc, etc. One compliment to the financial weathermen; they sure know how to sell compared to those weight loss exercise gear that one sees advertised on television. I guess that is the real difference between no education and a Harvard education.

Lose 20 pounds in 2 weeks for sixty dollars, or balance your portfolio the right way and see it all evaporate in front of your eyes in a matter of months. "Results in the past are no guarantee for future expectations." If you want to sell dishonestly, turn off someone's common sense. You can fool anyone if you turn off their common sense. That's why you always have to Quaerere Verum: seek the truth. Instead of our human flaws, easily exploitable through suggestion, insecurity and plain old greed.

Truth is, all you need is common sense. When you're leaving the door, do you ask yourself if you have your keys, wallet, umbrella, etc? Consciously or subconsciously you do. That's common sesne. Now when checking the weather, do you have blind faith in the prediction of sunshine when you see clouds outside? Probably not 100%; not having blind faith is also common sense. So why do you let someone turn off your common sense when reading or watching the financial tell-sell on the TV, Internet or newspapers? I don't have an answer to that right now but let's not do it again. The rain makes you wet faster than the it takes the sun to dry you. That too is common sense.

So when cheap money pours in again to inflate asset prices beyond the sun., think about Icarus and your umbrella. You don't need an MBA for that.

And remember, better grumpy and prepared, than insanely unprepared.