THINGS THAT MAKE YOU GO
06 January 2014
Things That Make You Go
Last week, in Part I of "That Was The Weak That Worked," we reviewed the equity markets in an attempt to see how equity investors managed to scamper through 2013 with the friskiness of puppies when all about them lay doubt and potential disaster.We found the answer in quantitative easing — of course.This week we will take a look at how the bond market managed to navigate the same 12-month period and see what can be learned about 2013 in order to forecast for 2014.Let's begin by considering the subject of logical fallacies — an endeavor rendered more obsolete with each passing day.
(Deus Diapente): The study of logical fallacies is useful in learning how to think instead of what to think. In learning how to deconstruct an argument, you learn how to
efciently construct your own thoughts, ideas, and arguments. You learn how to nd
fallacies in your own line of reasoning before they're even presented, which is a valuable methodology for learning how to think. Which is a lot more honest, liberating, and possibly more objective than simply regurgitating what society, teachers, parents, preachers, friends, or politicians tell us..."Learning
to think instead of
The very idea is enough to send many into an Austen-like swoon, and yet within this relatively simple construct lies a principle that, if it were applied to today's markets, would have every rational investor rushing headlong into the hills.Allow me to demonstrate using everyone's favourite logical structure: the syllogism.
A syllogism is classied as a point-by-point outline of a
deductive or inductive argument. Syllogisms normally contain two premises followed by a conclusion:
Premise 1: Miley Cyrus is the most talented musician of her generation. Premise 2: The most talented musician of every generation achieves legendary status. Conclusion: Miley Cyrus is a legend.
Simple.The conclusion, from a purely logical standpoint, holds water. The problem comes when either
of the rst two premises is not accepted by the person to which they are proposed.
At that point, the argument starts to fall apart.