”Misconceptions Play a Prominent Role in My View of the World” - George Soros

”Misconceptions Play a Prominent Role in My View of the World” - George Soros

Confession: I am coming to appreciate and adopt George Soros’ market world view(s),  increasingly with time, like a fine wine that gets better with age. I say this with hesitation, as a good number of my friends find him, his personal life, and/or his politics, distasteful. I once considered myself a Buffett disciple…I read all his letters,etc. I still have a great deal of respect for Buffett, but I find Soros more practically helpful, for the purpose of surviving the ‘den of thieves’ a.k.a. the financial markets.

Why bring up Soros, THE ”Evil Sith Lord” among all “Evil Sith Lords” (hat tip to jokester/fraudster Overstock.com CEO Patrick Byrne for either coining or popularizing that expression, even as it seems to describe him better than those he labeled) ?

The following headline, ”In The Past Week, We Heard 3 Huge Bears Say One Really Bullish Thing About The US” released earlier today by a growing business/financial news concern, seems to justify Soros’ well-documented obsession with human fallibility, reflexivity,etc.

What is the first thing that comes to mind, when you read ” In The Past Week, We Heard 3 Huge Bears Say One Really Bullish Thing About The US” ? The first thing that came to my mind, in my sick, bed-ridden state, was ‘must read this’, because (1) I, and other market participants, pay especially close attention to inflection points in money managers’ stance, and thinking…the headline does an incredibly good job of making me think that macro bears might have become bullish. (2) I am an occasional (if not sometimes ‘fully-dedicated’) short seller, so I’m very curious what others who also short are thinking. I’m wondering to myself  ’what am I missing?”  3. then I wonder who are these ’3 Huge Bears’ ? What did they actually say, and why?

I felt foolish and deceived as soon as I read the article. This ‘article’ mentioned Jeffrey Gundlach of Doubleline and Hugh Hendry of Eclectica, to pull off a technically correct,  ’journalistic sleight of hand’. I was wondering to myself, ‘who are you trying to fool?’ The screaming, big picture orientation of these two, for now, is to stay away from risk assets.

( in fact, Hendry in that same letter said ”This makes us bearish on most Asian stocks, bearish on industrial commodity prices, interested in some US stocks, a seller of high variance equities and deeply concerned that Japan could become the focal point of the next global leg down. On the plus side we also believe that we are much closer than before to the beginning of a bull market of perhaps 1982, if not 1932, proportions. We just need the last shoe to drop.“ 

Those who know Hugh and/or meticulously follow his written/oral statements, know that he is very focused on getting the timing right. Straight out of the horse’s mouth:

”Instead, the probability of making money can depend not on the end game but on how we get there: the starting point and transitory events in between have a significant bearing on whether one can ultimately profit from the envisioned outcome.”

Therefore, those of you haggling over his view on US nat gas, or the fact he said ‘interested in some US stock’ … you’re missing the bigger picture point and positioning he’s taking. It’s almost fraudulent, intended to deceive, or incompetent…there’s a chance I could be wrong here…chances are, my gut reaction, as outlined above, represents a minority reaction… but the circumstantial evidence, to me, points more to deliberate deceit.

By circumstantial evidence, I am referring to the pictures used in the article, the glaringly differing sentiments/assertions between the headline, article,and…actual positioning of both Hendry and Gundlach. Oh, also the selective use of certain phrases that they are bullish ‘something’…while deliberately omitting their bigger picture points.

Other circumstantial evidence - I’ve been alerted that this aspiring financial/business media concern, has function as somewhat of a de facto mouthpiece recently to entities who: (1) have all the media coverage in the world, and then some (2) are very biased entities, and don’t go about hiding their biases (3) are prominent members of the ‘priesthood’ of business/financial academia, which unknowing Americans may lend them greater credibility.

Of course, as a market participant who focuses on ‘what is’, rather than ‘what should be’, this is a mild example of the importance of understanding  both perception (especially if the perception is really a misconception, miscommunication) and reality with equal rigor…simply because ‘fallibility and imperfect knowledge’ mean that market participants can and do act on factually wrong or inaccurate information. All the time. In fact, I for one gain conviction to take an ”all-in” type of stance if/when the divide between perception and reality seems so great, that the mere weight of this absurd difference itself could be a catalyzing force.
Anyway, this is all too bad, because I’m usually a fan of the ‘little guy’… I for one have loved seeing this rising business/financial media concern gain greater prominence. I love seeing a promising David slay the Goliaths of the world, and in so doing, make it a better place.

But what is concerning me is that this media concern seems riddled with the same problems that the preexisting ‘old guard’ have, if not worse. Particularly concerning has been the pandering to financial power structures, more than the deceitful use of Hendry/Gundlach’s current investment orientation. So you get rid of one monarchic regime, only to replace it with a populist-rhetoric laden totalitarian regime?  Love Zerohedge or hate them, there is something uniquely American and noble in their mission to speak truth to power (don’t get me wrong, I have problems with ZH too, particularly certain writers on their site; that said I believe it is better to be approximately right, rather than precisely wrong).

In case it wasn’t made clear - I have nothing personal against this media concern. I have no financial interests in rivals, nor have I been  insulted/hurt by them. I want them to succeed, as yet another American success story, especially when our country is starving for successes… especially those that do it the right way.

Besides the David n Goliath narrative, I also want to see them succeed for another reason - the figure running the operation (rightfully)  fell from grace in the late 1990s/early 2000s, and I hope his story is/will be one of ultimate redemption. I believe in America, and part of that means allowing people to fail yet giving them second chances… and seeing some of them live out a beautiful, moving turnaround story.

In fact, it is this Japan-esque ‘saving face’ malady lingering in the financial, political,  & cultural spheres, that I believe is a poison, among many, that threatens America’s longer term viability. I strongly believe we need more people in positions of power, whether in the economic or political arena, who fell from grace, atoned, only to turnaround to do great things. What I think will contribute to America’s decay, is propping the political/economic clout of people who seem perfect on paper, and publicly/privately blind to their own fallibility… I find them the most dangerous/fragile to society.

Enough rambling. I may be making ‘much ado about nothing’… if so, I blame it on my physical weakness/illness (I’ve been bed ridden since yesterday…I feel sicker today than yesterday).

“On the abstract level, I have turned the belief in my own fallibility into the cornerstone of an elaborate philosophy. On a personal level, I am a very critical person who looks for defects in myself as well as in others. But, being so critical, I am also quite forgiving. I couldn’t recognize my mistakes if I couldn’t forgive myself. To others, being wrong is a source of shame; to me, recognizing my mistakes is a source of pride. Once we realize that imperfect understanding is the human condition, there is no shame in being wrong, only in failing to correct our mistakes.” - George Soros