When Everyone Agrees

Here is a short blog today as we are currently writing our end of the year letter and formulating our investment thesis for 2017. Bob Farrell was an absolute legend during his 5 decades on Wall Street and finished his career on the Street as the Chief Strategist at Merrill Lynch. Farrell encapsulated his 45 years of experience in his widely distributed 10 Rules for Investing.  As our thoughts turn to what is going to happen in 2017 we find ourselves turning to his sage like wisdom. While they are all of equal importance we find ourselves drawn to #9 as 2017 dawns.

  1. Markets tend to return to the mean over time.
  2. Excesses in one direction will lead to an opposite excess in the other direction.
  3. There are no new eras — excesses are never permanent.
  4. Exponential rising and falling markets usually go further than you think.
  5. The public buys the most at the top and the least at the bottom.
  6. Fear and greed are stronger than long-term resolve.
  7. Markets are strongest when they are broad and weakest when they narrow.
  8. Bear markets have three stages.
  9. When all the experts and forecasts agree, something else is going to happen.
  10. Bull markets are more fun than bear markets.

Seemingly, every single investing professional that we read or talk has the same expectations for 2017. Experts see a January dip being bought and Wall Street’s best and brightest see 2017 returning a rather staid 5% on average according to Barron’s. We have a funny feeling that isn’t quite how it’s going to work out. When everyone agrees – something else will happen. We will be back next week with our thoughts on how we feel it is going to work out. Hope you have a healthy, happy and prosperous 2017!!

I think we aspire less to foresee the future and more to be a great contingency planner… you can respond very fast to what’s happening because you thought through all the possibilities, – Lloyd  Blankfein

To learn more about us and Blackthorn Asset Management LLC visit our website at www.BlackthornAsset.com .

A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty. – Winston Churchill


Disclosure: This blog is informational and is not a recommendation to buy or sell anything. If you are thinking about investing consider the risk. Everyone’s financial situation is different. Consult your financial advisor.



The URI to TrackBack this entry is: https://terencereilly.wordpress.com/2016/12/31/when-everyone-agrees/trackback/

RSS feed for comments on this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: