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#2 doesn’t work. At least for heavily-traded sectors. Why? First: “The markets will remain irrational longer than you will remain solvent.” Fed policy pumped
by jl2718 6y ago
#2 doesn’t work. At least for heavily-traded sectors. Why?
First: “The markets will remain irrational longer than you will remain solvent.” Fed policy pumped in too much dumb money. If you don’t think like them, you lose.
Second: “Markets create their own reality.” Dumb money eventually creates smart results. Today access to capital is far more important than any other factor in success.
Third: “Opportunity is blood in the water.” Good investments are entrenched stable markets. Disruptive technologies kill margins for everybody.
- whimsicalism 6y ago> Fed policy pumped in too much dumb money Given fed policy, the outlook of the market seems rational. Why would the Fed not engage in expansionary monetary policy during a recession? Just so that the market better reflects how you "feel" it should look?
- CameronNemo 6y agoBecause monetary policy rarely works long term, and is a fatally blunt instrument. Fiscal policy can be applied much more carefully and is often far more efficient.