Thursday, August 20, 2009

The Perplexed Investor - Perplexed!

When I started this blog three years ago, it was born from the desire to MAKE myself write about the markets--more specifically my understanding (or lack of) understanding them. There's a huge risk embarrassment, but by doing so, I'm confident that I've become a better steward of my money.

Steward of my money. I chose those words carefully. I elected NOT to call myself an investor or a trader, but rather a steward of my money. We forget that we are human. As humans, labels are part of the way that we make sense of the world. Liberal, conservative, fundamentalist, provocative, predictable, flexible, stalwart, ....... All of these labels connote stuff. Labels are shorthand to distilling alot of complexity into a sound bite. Efficacious? Yes. Accurate....not always.

You might recall last October, I had an ambitious goal of reading Paul Krugman's articles on the Japanese deflation. Alas, my layperson status caught up with me, and I could not muster the brain power to tackle it. Hedge Funds and Systemic Risk, though a stretch, was more accessible.

The fundamentals are so screwed up. Either the market is ahead of itself- anticipating - or the market is just full of beans and getting ahead of itself.

I'll go to my grave believing that the market IS NOT prescient. It is anticipatory for good information, and it needs a hearing aid for bad information. However, once that information SHOUTS, then it hears and dispatches accordingly. That is "The Market Accordingly to Leisa" , and I've seen NOTHING in my observations that would yield a different conclusion.

The dollar is in jeopardy. And if you are in dollar denominated assets, what might you do?

That, my friends, is the answer to the conundrum that we call the market. We are likely to find ourselves in a currency crisis. It is something that I've mentioned here, but I've not committed any real thinking time to it. (Admittedly, it is a stretch). I suspect that if the dollar is to fall, then we'll have our own private US inflationary hell. Perhaps this is how the inflationista's wrest the titular "bad ass" crown from the deflationistas.

To say that this is a perplexion is an understatement. I've posited in this space before the imporatance of understanding currency and the inflationista/deflationista battle.


Anonymous said...

From viscous:

I really enjoy reading your posts. Thanks.

Leisa said...

Thanks viscous..

Urszula said...

I just read this post again.
I think "steward of my money" is a terrific phrase and that using it may help a trader be more prudent.