I’m sick of this old fart. He’s made a career in the post dot-com bubble calling out other pundits for being wrong. This is no way to make a living. He couldn’t cut it in the real world and retreated to the quiet comfort of California to bash everyone else for being wrong. I’m sorry but a few books, a JD, and a Psychology PhD, does not qualify you to write about the investment industry.
Here’s tool-boy’s writing style: write about the past. That’s it. Wow, he is so forward thinking to cherry-pick quotes from others in the past. Dr. D-Bag, Esq is now making a prediction for the future. He’s basing his theory on the past two decades, a small data bank for such a theory. Economic meltdowns in 1987, 2000, and 2007 make him think another will happen in 2011. At that pace by 2013 we should probably have WW III. 2015 would mean we have a socio-political meltdown and start pulling an inverse only physicists could graphically portray.
Naturally, as most people that get paid to write do, he’s ignored the big picture. There’s an economic theory that those with an education in finance or economics know about. It’s called the efficient market hypothesis. It states that markets are inherently inefficient in the short run, thus creating the types of bubbles we always talk about. Each time the market exploits the inefficiency, the inefficiency is ironed out. With the technological breakthroughs of the internet, we are able to trade faster, exchange information more rapidly, and thus exploit and iron out inefficiencies in shorter increments. Going back to the Depression (much wider data bank than Farrell chose) each major market meltdown has been less and less severe than the one preceding it. So its more frequent and less severe each time, and leads me to believe Farrell is just trying to publish BS.
Do I believe the domestic market is becoming more efficient? Of course! However I’m smart enough to know the US isn’t the big dog it once was. The flattening globe has made other regions more important, and sent investors to smaller, developing countries. The world is a different place from when Paul Farrell grew up watching “moving pictures” and these old farts need to stop putting out bull shit to get readers. I guess that’s why he works for Market Watch, and not Stanford.
What’s the lesson here? Read garbage like Farrell as you would The National Enquirer.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
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