Visitors Now:
Total Visits:
Total Stories:
Profile image
By silveristhenew (Reporter)
Contributor profile | More stories
Story Views

Now:
Last Hour:
Last 24 Hours:
Total:

Never Say ‘Never’ When It Comes To The Financial Markets

Saturday, October 8, 2016 6:42
% of readers think this story is Fact. Add your two cents.

(Before It's News)

wallstreetexaminer.com / by Jesse Felder via The Felder Report / 

“We’ve never had a decline in house prices on a nationwide basis.” -Ben Bernanke, July 2005

Just because something has never happened in the past doesn’t mean it can’t happen in the future. Believing this to be true is just another form of recency bias or extrapolation which, as I have written, is the single greatest mistake investors make. Furthermore, the sort of confidence that underlies the willingness to use the word “never” can be a wonderful sentiment signal on its own.

“In the investment world when you hear ‘never,’ as in rates are ‘never’ going up, it’s probably about to happen.” –Jeff Gundlach

This certainly proved true after Ben Bernanke famously used the word back in the summer of 2005. Real estate prices were just beginning to embark on their very first year-over-year decline on a nationwide basis just as he was denying the very possibility. The fact that Dr. Bernanke was so comfortable extrapolating the historical record indefinitely into the future and to disregard all of the evidence of a bubble should in itself have served as a clear warning.

More recently we have seen this sort of confidence appear in the bond market. Over the summer I wrote a pair of posts tracking what I thought was an ongoing “blowoff” in bonds (here and here). Since then I’ve collected a number of headlines that reflect exactly the sort of confidence that inspires the word “never” (or, in some cases, “forever”).

READ MORE

The post Never Say ‘Never’ When It Comes To The Financial Markets appeared first on Silver For The People.

Report abuse

Comments

Your Comments
Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

Top Stories
Recent Stories

Register

Newsletter

Email this story
Email this story

If you really want to ban this commenter, please write down the reason:

If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.