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The Greater Depression or - How I Learned to Stop Worrying and Love the Bear 2011.10.15

The Greater Depression or - How I Learned to Stop Worrying and Love the Bear 2011.10.15

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Published by nicknyse

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Published by: nicknyse on Oct 26, 2011
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01/22/2013

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The Greater Depression or:
How l Learned to Stop Worrying and Love the Bear 
 
October 14, 2011Private & Confidential
 
DRAFT
 
DRAFT
“Throughout
all my yearsof investing I've foundthat the big money wasnever made in the buyingor the selling. The bigmoney was made in thewaiting.
 - Jesse Livermore
Preface
3
A few months back, I turned on the news while getting ready forwork to see what the weather was going to be like that day. It hadbeen particularly hot and dry for the past couple of months withbasically no rain except for a random thunderstorm a few weeksprior. I wanted to wear this new pair of expensive shoes I had justpurchased, but
hadn’t
had a chance to waterproof yet, and while we
hadn’t
had a lot of rain lately, I wanted to be sure that they wouldbe safe. There is nothing worse than buying a new pair of shoes andruining them the first time you wear them.The first meteorologist I landed on said it was slight chance of clouds, but overall a beautiful day with no rain in the forecast. Thismeteorologist had been notoriously wrong to my recollection, andbeing the skeptic I am, I turned to another station to get a secondopinion. Just to be sure.The next one was a new weathergirl in town, who gave a similarstory, except she
didn’t
even mention a chance for clouds. She wenton to say that as we were clearly in a drought, and it
hadn’t
rainedfor weeks, there was an extremely low chance for rain today. Whileshe was pretty and bubbly and seemed trustworthy, she
didn’t
evenshow a shot of the radar, which I thought was kind of odd until Ilater found out that her shtick was giving sunny day forecastregardless of what the instruments said. As a matter of fact, it waslater discovered that she
couldn’t
even read meteorologicalequipment.Unsatisfied, I decided to go out on to my balcony and take a look atthe sky for myself. While it was a little dark outside, I thought it was just because it was still early - until I looked toward the west. There Isaw massive storm heads moving in, black with rain. Call me crazy,but I not only decided to wear another pair of shoes, but I alsobrought an umbrella. Just to be sure.My point is that I
don’t
need a weather man to tell me if 
it’s
raining,and even if the weatherman says,
“No
 
rain,”
I might plan for rainanyway if I see storm clouds on the horizon with my own eyes.There is a lot of this going on right now.The MSM tends to spin the news to serve its own purpose/agendabecause doing so is in their best interest; appealing to a certaindemographic, or telling its target market what it wants to hear helpsretain viewership. Few will argue that media bias exists. If well-informed conservative turns on CNN, he will likely be repulsed bythe blatant liberal slant to its reporting. Same for a liberal watchingFox News.What some people do not realize, however, is that this same biasthat can be seen so clearly on politically-based news stations alsoexists within business-oriented news outlets. I have learned, forexample, that getting all my economic news from CNBC is akin togetting all my political news from CNN and the New York Times.Currently, the MSM is trying to
“sell”
us on an economic recoverythat, frankly, has failed to materialize.As you might know, I tend to get most of my economic news fromnon-mainstream media outlets because I believe it can bedangerous to get all my news from one place, through one filter.And I have found some that provide true, unbiased analysis of whatis going on without the spin.I have been following some people such as Mish Shedlock andReggie Middleton for years, and have continued to read theiranalyses because they have been so spot-on and very far ahead of the curve. The sites I read called the top in residential real estate,the collapse of Bear Sterns weeks before it imploded, the Lehmancollapse months before it imploded, and so on.I have tried to aggregate information from several of these andother sources outside of the mainstream, with the intent of objectively basing my research on the data that is out there, notwhat I want or hope to see or what some talking head wants me tothink. To be sure, I would like nothing more than to see another 20-year bull market, especially at this stage in my life and career.However, I believe it is more prudent to base my plans on theoutcome that is likely to occur rather than the one I simply hope willoccur, because only then will I be able to avoid being caught off guard and hopefully be able to position myself to profit from it.

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