Curtain falls on a tumultuous year

• Posted by vinaydh
• on January 3rd, 2010

It’s curtains for one of the most tumultuous years in the history of wall street. The year started with a horrific plunge that gave way to the most astounding and most unloved rally in the history of wall street. It was a year when reputations were made and destroyed in the same year. Those who called the plunge right were fooled by the extent of the subsequent rally and those who called the rally right were taken aback by the extent of the plunge. In the end there was only one entity that was left standing with its reputation intact and that was the market itself. It proved once again that it could care less for reputations. Anyone who thinks that he/she has figured it out is day dreaming to put it euphemistically.

There are many so called experts who made a fool of themselves this year. It’s not the first time that they made a fool of themselves and I can assure you that it won’t be the last time either. There are countless videos on YouTube depicting the foolhardiness of usual suspects such as Cramer but Charles Nenner takes the cake in my opinion.

This interview took place on 3 Feb ’09. Now with the benefit of hindsight one knows that Nenner was horribly wrong about the market at that time. It’s not something that one needs to scoff at because no one can be right about the market all the time. But somehow Nenner is under the illusion that he is. At one point (around 3.35) he says that he is almost never wrong and if he is wrong it may be by a day. Mark Haines rightly asked him if that’s the case then how come he doesn’t own the world? Only Mark Haines could have asked that.

The idea behind this first post of the year is to drive the point that this market is above all. Keep an open mind and focus on what the market is trying to convey. Do not let these experts or your own bias color your judgement. Keep it simple and do not over think. Any fancy analysis that can’t tell if the market is going up or down at a given point of time is only of academic interest. It’s a game of odds and the quest for perfection will only result in frustration.

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