Whether you achieve outstanding results will depend on the effort and intellect you apply to your investments, as well as on the amplitudes of stock-market folly that prevail during your investment career. The sillier the market’s behavior, the greater the opportunity for the business-like investor.
~ Warren Buffett, preface to the 4th Edition of The Intelligent Investor, by Benjamin Graham
Comment: We count ourselves very fortunate to be living in such delusional times.
Those who look to the action of this government for specific aid to the citizen to relieve embarrassments arising from losses by revulsions in commerce and credit, lose sight of the ends for which it was created, and the powers with which it is clothed. It was established to give security to us all. … It was not intended to confer special favors on individuals. The less government interferes with private pursuits, the better for the general prosperity.
~ Martin Van Buren, 8th President of the United States, 1837
My comment: Mr. Paulson, you’re no Martin Van Buren.
Learning from history does not come naturally for us humans, a fact that is so visible in the endless repititions of identically configured booms and busts in modern markets.
~ Nassim Taleb, Fooled By Randomness, 2nd Edition (2002)
Taleb’s quip brings to mind this classic…
Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.
~ Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds (1852)
My comment: We are still largely in the delusional phase of the current bust.
Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule. ~ Friedrich Nietzsche
Exhibit A: A massive credit bubble fomented, sanctioned and maintained by a U.S. government cheered on by lenders and speculators who made reckless, ill-conceived bets.
For those properly prepared in advance, a bear market in stocks is not a calamity but an opportunity. — Sir John Templeton
My comment: How many are prepared for the mother of all bear markets?
The kernel of the nut is this: In our constitutional republic, sovereignty rests in the people. If the people are too stupid or ignorant, too lazy or indifferent, to hold their public officials accountable for violating the laws and the Constitution, then of course they will deserve the tyranny they will surely get.
Self-government is tremendously more difficult and demanding than living under a dictatorship. In a dictatorship, all you have to do is obey. I fear that concept appeals to some Americans today. It’s understandable. Responsibility can be a heavy load to carry. It’s much easier to relegate all of that to the Great Leader and just do what we are told.
Anybody who’s ever been in the military or a jail knows what I’m talking about. When you are deprived of the ability to make choices, you are simultaneously relieved of the responsibility for making them. Responsibility is the other side of the coin of freedom.
– Charley Reese, “Responsibility,” October 15, 2007