Of Fingers And Dikes

Of Fingers And Dikes…We believe the concept of perception versus reality is an extremely important distinction in the current economic cycle and circumstances of the moment. And remember, it’s not that potential misperceptions being priced into financial assets at any point in time are somehow bad, but rather THE issue of importance to us is making sure we are in touch with factual reality at all points in time so that we hope to make a judgment about whether what markets are discounting is correct or otherwise. If you ask us, trying to make an informed judgment about this distinction is an exercise literally crucial to ongoing investment decision-making and risk management. You already know financial markets are not moved by reality 100% of the time. Far from it. Human greed, emotion, fear, distress, etc. all get to take turns driving the financial market pricing bus. We just hope to be smart enough to know when a reckless driver has the wheel.

The rest is here ... well worth the read

http://contraryinvestor.com/mo.htm