I have said it before, but it is worth repeating – when you folks respond to what I do, I feel like what I do is worth my time. As well, when the responses are well written, lucid, thoughtful, and complimentary, such as the one below, using the word “inspired” is not hyperbolic.
Indeed, your 2-part “Tea Leaves…” reply to my question last week is the single most helpful info/perspective I’ve read of late on macro analysis and future indicators for the US economy – and I read several such analyses weekly. Your reply in content and as an example of critical thinking is invaluable for this reader, and I think for others as well. Are you aware that your “Ask Trader Ed” [newsletter] dated today only links Part 1 of your “Tea Leaves…” reply? Readers therefore need to drill down into your daily posts to access Part 2 – a loss for them if they don’t figure that out. Perhaps next Friday you can provide links to both parts of your “Tea Leaves…” reply, as it is a bona fide keeper. Kudos! for an exceptionally useful newsletter service in the world of investing noise.
As requested, here are the links to both Part I and Part II of my commentary, for those who might not have found both parts.
Part I
Part II
As much as I appreciate your responses for what they say about TraderPlanet and what I do at TraderPlanet, my focus remains education, and the writer of the email above raises two points that if illuminated are educational – critical thinking is an important aspect of investing/trading (indeed life) and the investing/trading world is full of noise. Don’t misunderstand, I am not religious, I am literate, but the following quote from Scripture (Romans 1:22) sums up the “noise” quite nicely – “Professing themselves to be wise, they became fools.”
I don’t have enough fingers and toes to count the number of analysts who have predicted with righteous solemnity the future of the economy or the market and, yet, were completely and embarrassingly wrong. I have no quarrel with analysis. In fact, as I have said, it is a necessary and integral aspect of the investing/trading world. No, my quarrel is with those highly intelligent, highly credentialed individuals who flat out predict with certainty, and those less capable folks who simply foster fear with doomsday predictions. Our world is full of both characters.
The reality is that many variables influence economic activity and market movement is abstract, and to understand both, one has to accept that certainty is not realistic. Yes, sometimes analysts are right on some big predictions, and they become instant oracles, but the truth is no one seems to remember all their predictions that were wrong. We should look at batting averages, not just the grand slams to assess credibility.
As well, we should formulate our own assessment of economic activity or market movement based on reliable data, how analysts use that data (their thinking process), and our understanding of how the data might affect the big picture. We may be right, or we may be wrong about the future, but, if we are intellectually and strategically nimble, we can turn on a dime if needed because we understand economic or market certainty does not exist. This, my friends, is the essence of critical thinking, a form of analysis that speaks to possibility, not certainty.
Trade in the day; invest in your life …
Trader Ed
