Bringing the Country Together

If you had asked us last night what it would take to get some unanimity from the punditry on any subject, our guess would have been easy:  Some attack on the USA.

President George W. Bush had one of his finest hours in responding to the crisis and addressing Congress after 9/11.

To our surprise, there is an easier way to bring extreme political pundits together — just award the Nobel Peace Prize to the President!

People cannot agree about missile defense, Iraq, Afghanistan, the economy, and certainly not about health care.  They can agree that they do not like the Obama leadership.  What a change in a few months.

Our Take

On the policy front, regular readers know that we are not surprised at the current criticism.  The problems were large and the Administration was not very fast out of the blocks.  The effort to work with Congress has yielded compromises criticized by all.  We have a particular disappointment — the decision to pour more investments into banks instead of addressing "toxic assets" directly.

At least we realized that it was a tall order.

On the investment front, there is a naive reaction that has created a promising investment climate.  Those who disagree with the Administration policies, perhaps (like us) on solid grounds, have concluded that "it will all end badly."

Perhaps it will, but the time frame is far longer than that of any reasonable investor.  To pick two examples, we have been lamenting trade imbalances for over 40 years, and imported oil for nearly as long.

Biggest Investor Mistake

We are all entitled to our opinions.  We get to vote and to express our thoughts without fear of reprisal.

Having said this, do you want to get a return on your investments, or do you just want to sound off?

If you are interested in a financial return adopt the following rule:

Do not think about what you believe should happen; instead focus on what will happen.

Most of the buzz is about the former, since everyone can have an equal opinion.  It requires no knowledge beyond regular human experience.  This is why sex scandals are so popular.

Figuring out what will happen requires both knowledge and methods–actual expertise.  The average investor is not interested, mostly because it requires too much work.

The Nobel award has no more to do with investing than did the Olympics decision.  It is better to focus on the corporate earnings season.

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