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Here's A Great Way To Lose Money...

Tyler Durden's picture





 

Submitted by Simon Black via Sovereign Man blog,

There’s a nasty little parasite that exists in nature known as the nematomorph hairworm (Spinochordodes tellinii) which typically infects grasshoppers and crickets.

Once fully grown, the worm is able to profoundly affect the behavior of its host; most notably, the worm can actually compel a grasshopper to throw itself into water.

This is great for the worm as it needs the moisture to reproduce. But for the grasshopper, it’s deadly.

There’s another vile protozoan known as Toxoplasma gondii. According to a 2007 study, rats and mice who are infected with it demonstrate a marked reduction in natural defenses, making them far more susceptible to being eaten by cats.

Nature is full of these unpleasant parasites which cause their hosts to engage in irrational, destructive, or even suicidal behavior.

Of course, they exist for humans too… especially for investors. In fact probably the number one parasite which affects investors is a very peculiar emotion: fear.

Specifically, it’s the fear of missing out that drives so much irrational investment behavior. Nobody wants to miss a big boom, no matter how baseless the fundamentals.

It’s this fear of missing out that compels people to continue investing in stocks, even though they are near all-time highs and trading at Price/Earnings ratios that are historically dangerous.

Ironically, this fear of missing out is stronger than the fear of loss. But if everyone else is jumping in, it’s easier to ignore the obvious risks of losing our life’s savings investing in ridiculously overvalued stocks.

Following the crowd is a great way to lose a lot of money.

Some of the most successful investors in history have been those who had the courage to go against the investment herd mentality. They conquered the fear of missing out, and they bought what everyone else hated… or looked where nobody else was looking.

In today’s investment climate, though, where central bankers are printing trillions of dollars per year and pushing up the prices of assets everywhere, it’s hard to find too many sectors or asset classes that are ‘hated’. But a few exist:

1) Precious metals

The market has all but stuck a fork in gold. It’s done. Or at least, so says the conventional wisdom. Taper talk and sentiment of stronger economic growth have prompted investors to mostly abandon gold, silver, platinum, etc.

2) Mining companies

With losses in the metals and mining margins declining, share prices for mining companies have gone from ugly to bufugly… and many long-term mining investors are collectively ripping their faces off.

3) Emerging market currencies

Currencies across the developing world– Turkey, India Indonesia, Uruguay, etc. have been battered senselessly over the last few months on fears of a global slowdown despite many of those nations’ stronger economic and demographic fundamentals.

As for what’s not hated– that’s easy. Stocks in the US and Western Europe are at/near all-time highs.

The Chinese renminbi is at a multi-year high. And inexplicably, the market is showing a lot of confidence in both the euro and the dollar right now.

Government bonds of heavily indebted western governments are still viewed as no-brainer safe havens.

The governments of Spain and Italy, in fact, just issued new bonds at a record low yields… nevermind 57.7% youth unemployment or obscene levels of debt and deficit spending.

And, despite gradually rising interest rates which adversely impact prices and affordability, US housing is once again front and center in the media as a safe investment.

Last– what’s not even on the radar of the collective investment herd?

In my view, few conventional investors are even thinking about farmland overseas (ex-US), or private equity in developing markets. More on those soon.

 


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Thu, 01/16/2014 - 18:23 | Link to Comment Motorhead
Motorhead's picture

Gold, bitchez!

Thu, 01/16/2014 - 19:26 | Link to Comment Fredo Corleone
Fredo Corleone's picture

As an aside, the thumbnail is simply great:

"Ash - any suggestions from you and Mother ?"

"No...we're still...collating."

Thu, 01/16/2014 - 21:40 | Link to Comment flacon
flacon's picture

Specifically, it’s the fear of missing out that drives so much irrational investment behavior. 

For me, it's FEAR of missing the big swoon, which never happened. Maybe I should go buy calls on QQQ or SPY... and if I do, watch out below because I will buy at the top. 

 

 

Thu, 01/16/2014 - 23:39 | Link to Comment JackWills
JackWills's picture

"it’s the fear of missing out that drives so much irrational investment behavior"  I agree and those perceptions of fear are shaped by the control of mass media.  And the parasites run it for the benefit of their genus.  Just remember that the essence of a trade it the perception by the parties of its worth, and that is shaped by the media they watch day in and day out.

Just today on TV they were still plugging social media for a way for first responders to reach out to the community and for the community to reach back out, what a bunch of crap.  They are just trying to keep social media in the news that is why they blabbered the word facebook like ten times in that one minute news piece.

I guess they have to keep on selling facebook stock to pension funds at rip off valuations so the the parasites can liquidate some of their stock holdings.

The stealing is so outrageous and so in your face that its disgusting.

Thu, 01/16/2014 - 23:41 | Link to Comment JackWills
JackWills's picture

Speaking of biblical plagues, maybe the grasshoppers were not the real plague in that scenario...hmmmm

Thu, 01/16/2014 - 18:25 | Link to Comment brombones
brombones's picture

Isn't it possible that we all are the grasshoppers infected with our own type of Spinochordodes tellinii, and don't know it? What if all the idiocy we see daily is benefitting parasites in a way and for a reason that we can't comprehend?

MIND=BLOWN

Thu, 01/16/2014 - 18:27 | Link to Comment brombones
brombones's picture

Oh shit, all of this idiocy is benefitting parasites in a way that I CAN comprehend!

Thu, 01/16/2014 - 19:05 | Link to Comment Rusty Shorts
Rusty Shorts's picture

Save the Guinea Worm Foundation

http://www.deadlysins.com/guineaworm/

Thu, 01/16/2014 - 18:25 | Link to Comment whisperin
whisperin's picture

Enter Bitcoin or its successor a great disruptor to the status quo!

Thu, 01/16/2014 - 18:25 | Link to Comment ebworthen
ebworthen's picture

"Glad you got that crab thing off my face and out of my stomach, I'm suddenly very hungry."

"Scree!!!" scurry...scurry...scurry.

IRA & 401K holder dead.

Alien moves on.

Thu, 01/16/2014 - 18:27 | Link to Comment Dapper Dan
Dapper Dan's picture

In the very early days of ZH this comment was posted by someone and I saved it,  as I thought it profound.

Moral men pitted against the immoral have this advantage, primary allegiance to loyalty and honor.  Predators and parasites have low latency loyalty if any.  Moral men draw from a deep well of everlasting water while immoral sup dew and tears.  No way can they maintain a cohesive esprit de corps only on plunderous gain; men that subscribe to such venality have none of the other qualifying virtues with which to maintain their power.  Like the USA, betrayed from within by self-servers instead of men of majesty, (the bankers) will be brought down by the decrepitude of avarice. 

Money is an instrument which conveys man's goodwill service to fellow man in furnishing him the essentials of survival and luxuries of hard won age in grade.  Losing sight of that, men seek profit in algorithms, sneakery, subtle diminishment of the institutions and exchanges. 

They never prosper long.  It is like an error in genetic code which destroys the creature with cancer.  Men who trade without the final object (increase of joy for their fellow) are in the wrong path, and sabotage their own futures. Here and in eternity.

 

Thu, 01/16/2014 - 18:53 | Link to Comment chump666
chump666's picture

That is a f*cking wild quote!

Thu, 01/16/2014 - 19:28 | Link to Comment J S Bach
J S Bach's picture

Thanks for saving that DD... very profound.

Thu, 01/16/2014 - 21:22 | Link to Comment HUGE_Gamma
HUGE_Gamma's picture

i had my friends at the NSA track this down and apparently its been posted on ZH numerous times.. but still cool

i wish i had bought calls on immoral back in 2009

Thu, 01/16/2014 - 18:27 | Link to Comment CheapBastard
CheapBastard's picture

No one saw this coming.

Thu, 01/16/2014 - 18:32 | Link to Comment tony wilson
tony wilson's picture

Nature is full of these unpleasant parasites which cause their hosts to engage in irrational, destructive, or even suicidal behavior.

 

what do you think is in chemtrails.

nature is nature some humans in the military are satanic.

they have been testing on us for a very long time 10 years ago it went nano.

 

old info

 

 

The Penetration of built-up areas by Aerosols at night - Porton Down Public Area Biological Warfare Experiments on Norwich

 

http://www.nr23.net/govt/spray.htm

Thu, 01/16/2014 - 18:35 | Link to Comment Double.Eagle.Gold
Double.Eagle.Gold's picture

Thanks for the content free post.

Thu, 01/16/2014 - 18:46 | Link to Comment q99x2
q99x2's picture

Bitcoin bitchez.

What the hell was that a photo of?

 

Thu, 01/16/2014 - 19:05 | Link to Comment Town Crier
Town Crier's picture

That's the newborn monster in the movie Alien.

Thu, 01/16/2014 - 18:48 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

I thought Simon was gonna finish off with the Lemings-off-the-cliff (mass suicide) example, but he didn't.

These generalities (from ALL ZH writers) are fine and entertaining, but hardly more than the financial equivalent of a Farmer's Almanac... What we actually need is the weather forecast for the "foreseeable time window of interest".

Weathermen keep their jobs because they do a pretty good job in forecasting the weather for our "foreseeable time window of interest".  Blogsite writers and CFPs should be held to the same high standard of forecasting -- to allow for planning and front-running.  Otherwise we can read our own tea leaves, while flipping through the Farmer's Almanac pages.

After maxing out the PM content of one's assets at a predetermined limit (say 10-20%), it's wise to allocate additional 'disposable income' into other investments and revenue streams -- no matter what the PM zealots say.  You manage & mitigate risk, and maximize ROI on a consistent basis by having a well-diversified portfolio of real and paper assets.

p.s. I don't give a damn that gold mines and their agents & shills are hurting.  If the prices fall further, they will experience what the rest of society experiences:  Industry consolidation. 

Note that the cheapest gold available is already above ground.  It's called "Cash for Gold 2.0"

Thu, 01/16/2014 - 21:08 | Link to Comment Drifter
Drifter's picture

"These generalities (from ALL ZH writers) are fine and entertaining,"

I think they're getting boring.   Does seem ZH is losing its edge, and that observation comes after reading ZH 3+ years now.

Maybe there's just not much real financial news to report these days.  QE and criminally manipulated markets.   How many different ways can you report that?

 

Fri, 01/17/2014 - 03:07 | Link to Comment frenzic
frenzic's picture

The edge was lost when thruth was banned.

Thu, 01/16/2014 - 18:50 | Link to Comment chump666
chump666's picture

The markets are not nature and do not reflect nature except for flawed human nature, that would be corruption and/or segregation of wealth and money from the poor and maintaining the super rich.  This cannot be found anywhere in the natural system.  It is self destructive and in the end a psychosis to symbiotic systems.  If humans reflect nature, which we also don't as we invented the term 'nature', we would not even be considered a parasite.

It would be prudent to define humanity and nature as two indifferent things. 

 

Thu, 01/16/2014 - 18:51 | Link to Comment HedgeCock
HedgeCock's picture

Four species of fungi that turn ants into zombies before killing the ants, have been discovered.

Thu, 01/16/2014 - 19:02 | Link to Comment brombones
brombones's picture

Obama can turn aunts into zombies. RIP Aunt Jan

Thu, 01/16/2014 - 21:44 | Link to Comment SilverRhino
SilverRhino's picture

Damn,  we need to put that into some water supplies.

Thu, 01/16/2014 - 23:43 | Link to Comment JackWills
JackWills's picture

I can think of one species of parasites that love to turn the Gentiles into Goyim Zombies lol

Thu, 01/16/2014 - 18:58 | Link to Comment Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Here is another great way to lose money.

http://swampland.time.com/2014/01/14/the-u-s-overspent-millions-on-penis...

The U.S. government paid around $86 million too much for penis pumps, according to a government watchdog.

The federal Medicare program covered nearly 474,000 claims between 2006 and 2011 for the vacuum erection systems, a treatment option for erectile dysfunction, Reuters reports.

The bill: $172 million, according to the report from the inspector general for the Department of Health and Human Service. Had the government paid the price regular customers pay for penis pumps, it could have saved $14.4 million a year — or a total of $86.4 million over six years.

...

Thu, 01/16/2014 - 19:08 | Link to Comment Dapper Dan
Dapper Dan's picture

Pump and dump, so to speak.

Fri, 01/17/2014 - 00:16 | Link to Comment StychoKiller
StychoKiller's picture

"'Tis the screwing ya get for the screwing ya got!"

Thu, 01/16/2014 - 19:02 | Link to Comment Sudden Debt
Sudden Debt's picture

yeah, but sometimes I feel like I have a silver fever which doesn't seem te make sence.
I'm buying every months since 2007 and to be honest, that's already a pretty long time.
I got more than I'll probably need but there's always that extra 100 ounces that I need.
I think it's time for me to look for a second investment but I simply can't find any that looks good and meets the criteria

Thu, 01/16/2014 - 19:26 | Link to Comment Race Car Driver
Race Car Driver's picture

> I think it's time for me to look for a second investment but I simply can't find any that looks good and meets the criteria ...

If you don't already have one, an All American pressure canner is irreplaceable when it comes to preserving your own food.

And, there isn't much that looks as good as a few hundred jars of preserved food on your pantry shelves.

Food. The next Big Thing. Get some now while supplies last.

Thu, 01/16/2014 - 19:29 | Link to Comment Sudden Debt
Sudden Debt's picture

I have a pallet of freezedried food that is good for another 20 years which I bought when fukushima blew up.

the kids hate it, the wife hates it but she doesn't want me to throw it away to remind me of the stupid decisions I sometimes make :)

And to be honest, when shit hits the fan, we're outahere!

Thu, 01/16/2014 - 19:50 | Link to Comment PrecipiceWatching
PrecipiceWatching's picture

My pallet has "expiration" dates from 2023-2043.

We can be stupid together.

Oh, and off topic, expiration dates are bullshit.

 

Thu, 01/16/2014 - 19:07 | Link to Comment dragoneyes74
dragoneyes74's picture

Gold and silver are approaching the all-important downtrendline in the next few trading sessions and will be forced one way or the other.  It should be a decisive move on volume that provides clarity for the short-term direction.  You can make a pretty good case either way.  If it rolls over there is always the possibility that we retest the June lows so the big money can accumulate more at lower prices and we break out later this month, but the more times we test those lows, the more likely it is we break down.  And the fact that a lot of contracts have built-up in this area over the past six months will lead to significant long liquidation, not on the scale of last April but you don't want to be on the wrong side of that for sure.  If we pop thru and close above that downtrendline we should make a move to the $1334 area in gold.  Maybe the metals are waiting for the dollar to make a move, but one way or another it's on very soon. 

 

Thu, 01/16/2014 - 19:15 | Link to Comment disabledvet
disabledvet's picture

"fear" is not an emotion. It's really hard to believe something this stupid keeps getting repeated all the time. "Fear" in fact is a FEELING...meaning "something that is to be anticipated." This is not to say "fear isn't real" or "isn't irrational"...on the contrary fear is ALL TOO REAL...hence the term "greed and FEAR" as the the two major human "market components." a trading algo can only trade based upon the available inforation...NOT "new information" (fear, greed....ETC....) hence the need to become "maximally aware" of what is going on...not only in real time and in an observable way ("the internet" and "the i-phone" or "the win-tel operating platform") but also in a psychological sense of "how does one respond to "future" (meaning FEELINGS.) this is where the actual information is gathered, collected, correlated, stored, etc. "and yes, you can make a machine that can do that." that would include attacking parasites that cause physical "living" beings to do irrational things. Of course this is "the problem" of humans....they differentiate the "heroic" (acts of self-sacrifice meant to inspire) versus the irrational (self-sacrifice as simply a meaningless gesture...or worse...simply done in the name of your "self" rather than you in a social, political or economic context) and only "behold" the latter...rather than listen to say...Simon Black blather on upon something of absolutely no consequence whatsoever (namely...Simon Black...who is a total dipshit.)

Thu, 01/16/2014 - 23:50 | Link to Comment skank
skank's picture

Spaceballs dancing Alien spoof
http://www.youtube.com/watch?v=H0ePMb7um9E

Fri, 01/17/2014 - 01:03 | Link to Comment soopy
soopy's picture

But the best, best way to lose money is to read ZeroEdge fastidiously and follow their recommendations. Guaranteed.

Fri, 01/17/2014 - 02:47 | Link to Comment Prisoners_dilemna
Prisoners_dilemna's picture

Specifically, it’s the fear of missing out that drives so much irrational investment behavior. Nobody wants to miss a big boom, no matter how baseless the fundamentals.

As I read this line I could "hear in my head" the ZH responses recently about bitcoin. And I thought to myself, some conservative due diligence is warranted concerning bitcoin. I don't blame my fellow ZH-ers for taking it slow and questioning bitcoin.

 

But then I got to this line:

"Last– what’s not even on the radar of the collective investment herd?

In my view, few conventional investors are even thinking about farmland overseas (ex-US), or private equity in developing markets. More on those soon."

 

And I realized Bitcoin is a great investment because it is still 95% off the radar.

 

 

Luckily I dont have any FRN's to spend because I don't know if I would buy more AU or BTC at this point.

Anyone else having trouble deciding which pile to stack up higher right now??

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