A Mind Of Its Own

These few days I have been talking to some professors regarding some macro economics of today and in particular about commodities market. As usual when I talk about commodities market, I will mention Jim Rogers stand and seek the professor opinion. I hold a high opinion for this professor though.

Professor R said, "I'm not trying to be arrogant, but in my opinion, Jim Rogers is at most beginner level in the economics scholarly realm."

I like this statement a lot. At least he has a stand and is willing to stand against a professional in the finance industry or at least on wall street. The reply for me is way too easy. I could have just said, "Well, he is a billionaire?" But I didn't. I began to think about it and I totally agree with this statement. It might just be true that Jim Rogers is a newbie at economics (scholarly level).

I think through a lot and I reflect back on what I have learnt about this market. Stock market is not just any market where you trade stuffs. It has a mind of its own. Ben Graham calls it Mr. Market. I call it Mr. WTH (just kidding). In a way, how often have we seen the fact that the market is diverging away from its fundamentals for no reason. I got burnt badly trying to short a market that is simply shooting the roof back then in september even when all economic data fall within my expectation.

Dot com had a mind of its own. Housing had a mind of its own. All economists will tell you that it should not happen. Greenspan did it, Ben Bernanke did it. They are all great economists in the world but they can't explain certain things in the market. In addition, Noble prize winners failed with LTCM because the market stays irrational way longer than they can stay solvent.

I am not saying that we should throw away our economics knowledge. I want to emphasize to you that you have to always remember economics is economics and stock market is stock market. They are two different things that we are talking here and they don't go hand in hand usually.

Because

You will always see things like "News are freaking bad, Market goes up 2 percent."