I’m really starting to think that no matter what we feel this crisis is comparable to (be it the Depression, the 70s, etc.), the instant feedback that characterizes our world today will ensure that there is nothing in our history that will be quite like this crisis. It is truly fascinating to read what people are saying and see how quickly sentiment is changing. I feel like you could literally characterize the popular sentiment the last few weeks as follows: Two weeks ago: Growing concern and awareness of a major problem, yet still an overall attitude of dismissiveness Last week/Early this week: Extreme panic, widespread doom and gloom, sky is falling mentality Last couple days (in the process of developing): The worst is over, we’ve more or less hit the bottom, time to buy I know this is an oversimplification, but it really seems like this is exactly what has happened. I can’t believe this latest turnaround. - Despite a number of terrible macro reports regarding housing, industrials, shipping etc., markets up nicely yesterday, and poised to end the week on a high note - Buffet encouraging everyone to buy - http://bigpicture.typepad.com/comments/2008/10/sentiment-updat.html – Big Picture’s Barry Ritholtz, who I think quite highly of, now thinks the worst is over. Perhaps even more interesting than Barry’s input, read some of the comments, as quite a few of the responders agree with him (singing an entirely different tune from last week) - Yahoo! Finance just had a headline (which has since changed… damn you, Yahoo!), that was something to the effect of “Oil rises on expectations that recession concerns exaggerated” Really? So we’ve gone from denial, to all out panic, to optimism in around three weeks? Ah, if only it were that easy. I’m not holding my breath.
It’s a cash cow for the media. “The world is ending” versus “Now is the chance to get wealthy beyond your imagination” makes for great headlines, news stories, cocktail conversation etc. They can’t repeat the same thing over and over so it evolves quickly from day to day.
You do realize that investment science is not really a science right? Its a make-belief world and make-belief jobs. We are all doing what we can to pass time.