The Cheerleaders

We’re all just walking each other home


Nassim Taleb, author, seminal thinker, and developer of theories that are likely to endure in the field of uncertainty, never reads newspapers or listens to  commentary on current affairs. He holds it is always wrong.

I agree with Taleb. But I do follow news commentary precisely because, at inflection points in the cycle of human behavior, its wrongness consistently confirms my outlook for significant change. At these moments, when all measures of valuation in markets are at extremes, and social mood is at one end or the other of the spectrum, pundits will invariably argue for a continuation of the trend in force.

Typically, after the first big crack in a long advance, commentators rush in to dismiss the drop as an aberration and insist that investors hold their positions. No exception now. The Dow Jones Industrial Average has fallen 19% from its all time high in May to the recent low, and these are some of the headlines:

Don’t freak, Buy Because Stock Carnage Never Lasts
–August 24, 2015, USA Today

The No-Stress Way To Survive A Stormy Market
Stay chill. Market downturns happen. Pay as little attention as Necessary. –August 15, 2015, Time

The Single Most Important Piece Of Advice During A Stock market Crash: Don’t Sell
–August 25, 2015,

Worried About The Stock Market? Whatever You Do, Don’t Sell
Here’s what you need to know: Don’t sell. Let me try that again, with greater emphasis: Do. Not. Sell.
–August 25, 2015,

With a little background checking, a reader can find plenty of reason to disregard this kind of foolishness. The writers are most apt to be inexperienced and way out of their league.

What is more disturbing is that Wall Street Strategists, who ought to know better, are on the same track. The Chief Investment Officer of the firm where we keep our money market accounts, issued a report on August 27 that said in part, “We maintain our positive outlook on equities…” I honestly do not know whether he is being disingenuous or just asleep at the switch. I think it’s the latter:

Asleep at the switch: a term from 19th century American railroading, when it was the trainman’s duty to switch cars from one track to another by means of manually operated levers. Should he fail to do so, trains would collide.

In common usage, similarly disastrous results are implied.


 I believe we have entered the period in which no asset class stands up to the onslaught of a Grand Supercycle Bear Market. There will be rallies, violent ones along the way, but there will be no new highs in the markets in our lifetimes.



No one should consider any part of this presentation as a recommendation to buy or sell any securities whatsoever.

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