Finding My Way Through An Imperfect Journey
Submitted by QTR's Fringe Finance
On my jog yesterday morning I was listening to a podcast about gambling addiction and heard the host bring up the age-old story of a guy selling sports betting picks. The host laughed and asked the obvious question: if this guy is so good at picking winners, why does he need to sell his picks? Why doesn’t he just bet on them himself and get rich?
It’s a fair question, and one I’ve asked about plenty of people over the years. But for whatever reason, after having just finished writing my latest investing dashboard piece, I found myself turning the question around on myself. If I think my analysis of markets and investments is worthwhile, why am I spending my time writing about it instead of simply investing my own money and going about my business?
What exactly am I doing here? Am I really just a “fear monger”? It’s a fair question. Austrian economists have spent decades being accused of peddling doom, predicting catastrophes that never arrive, and frightening people into buying gold or subscribing to newsletters. And frankly, some people have made great livings doing exactly that.
To borrow a term from John Cusack in High Fidelity, am I just part of a “whole sick, sad, miserable subculture” of people who spend their lives obsessing over financial catastrophe, convinced they see something the rest of the world doesn’t?
It’s a fair question. Another fair question is: when does pointing out structural problems become fear mongering, exactly? Is questioning our debt addiction, perpetual deficits, and monetary debasement really selling fear, or simply acknowledging risks most people would rather happily ignore, like that scene in the Matrix where Cypher salivates over being rich and eating steak in a world he knows doesn’t exist?
Or, is the problem simply that I’m not sufficiently huge-brained to appreciate what the intellectual giants peddling Modern Monetary Theory have apparently discovered: that centuries of economic thought, the laws of arithmetic, and everything mankind has ever understood about debt, money, and scarcity have been rendered obsolete because Paul Krugman has given it his blessing? Could this man on the left really represent the pinnacle of the compendium of all human thought about economics?
I suppose the distinction comes down to whether you’re genuinely trying to understand the world or just trying to scare people into paying attention. And I think it’s fair for anyone, including myself, to occasionally ask which side of that line I’m on.
The rest of my run turned into self-examination.
As I wrote back in May in “You Can Never Win, You Can Never Be Right,” I’ve come to accept that I’m not a good trader, but that doesn’t mean I think my analysis is terrible. In fact, I think after a couple of decades of watching markets, working at a public company startup, working with some of the best forensic investigative short sellers in the world and being suspicious of just about everything Wall Street tells me, I’ve developed a reasonably useful way of looking at things.
But, as I explained back in May, I’ve also learned, sometimes at considerable personal expense, that having a decent understanding of what’s happening and making money from that understanding are two different endeavors.
There are a million ways to be right about something and still lose money. You can be right too early, right for the wrong reasons, or right about the big picture while completely misunderstanding the path the market will take to get there. Or my favorite, which is a SuperSized™ kick in the dick (Fig. 1), you can identify an opportunity, buy it, get impatient, sell it, and then watch it do exactly what you thought it would do in the first place.
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