How Much They Do Understand Is Less Than How Much They Think They Understand, Thus Short

by Johnny Debacle

While we believe the trend of humanity, as a whole, is to understand more and more, we believe people have been putting too much stock in their ability to understand things and that this segment of the market is peaking. Recent developments in Global Warming have been hammering this point into our brains, but one need only pick up anything that has macroeconomic analysis or tries to understand the federal deficit, national debt and foreign capital flows to get a sense for our state of Peak Knowing Less Than One Thinks One Knows.

Recommendation: The investing implications of this are both confusing and potentially paradoxical, so we suggest ignoring them lest you create a sucking black-hole of reason. It’s ok to not know something and to admit it, even if you are a climatologist (the latter would probably get you fired from certain financial institutions). It’s even more ok to know that Long or Short Capital understands everything and even has a model for it. We are the exception.

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