Wednesday, April 29, 2015

More Important to be Right or Alive?

While casually surfing the internet reading trashy news, this particular article popped up and I read it.

Well, the article is written by the Straits Times and there is a legit video, even though it was posted on All Singapore Stuff (far from my idea of a good content provider).

Even though the pedestrian light was flashing green, the girl still had right of way to cross the road, regardless of what she was doing. Clearly the driver is at fault for not seeing the girl crossing. I bet he feels horrible about it.

However, is the girl too at fault? I don't think that she is at fault for crossing when the light is in her favour. But I do fault her for assuming that she is right and not being more conscious of her own safety. It should not be taken for granted that you can always cross the road safely. Yes, it should be safe, but it is not always the case. She should have paid attention while crossing the road because, as this is a case study for itself, drivers do make mistakes too. As long as people drive cars, cars will always be dangerous because of the human element of error.

This brings me to another ad, somewhat related, that was in New Zealand to tell people to slow down.

However, the main point of the ad is the same. Sometimes other people do make mistakes, and even if you are right, that doesn't mean that you're going to walk away victorious.

Now let me bring that idea over to investing and about my personal experience. I have long held (and still do) that the US markets are overvalued and expensive. And yet they still keep hitting new all time highs. I'm an idiot, aren't I? When I first started, I was so sure about my fundamental analysis of the broad US economy and its (at least) bleak short term future. Horrible / misrepresented underlying data alongside a soaring stock market fuelled by unconventional monetary policy?

Sounds like a jackpot bet if I ever heard any! Unfortunately, another lesson I learnt is that the stock market is not the economy. You would think that they go hand in hand and follow each other closely, but sometimes (which are times like these), there is a massive divergence that just stays that way stubbornly for long periods of time. I have short the indices before I finally realized, and I have been steamrolled by them.

I'm very confident that in a few years from now, everyone will look back at this period and go, "Seriously, what were we thinking?" and my expectations will be proven right. Until I can see signs that the stock market is finally wising up to the reality of the economy, I am sitting this one out. My crystal ball's accuracy is not very good in the short term, I must confess.

The light might be green for me, but I am not going to cross the road if I can see stupid cars trying to go.

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