Thursday, October 23, 2008

Minyanville posting: Resist the Urge to Overshoot

This week's Minyanville posting looks at the issue of markets overshooting, including an important point learned at last evening's hedge fund seminar that I conducted in Boca Raton, FL re mutual funds, the inability to access credit, and forced liquidations.

"Markets can remain irrational longer than you can remain solvent."
- John Maynard Keynes

Remember the prediction of $200 a barrel of oil? Peak oil overrode any rational thinking regarding demand destruction as speculative positions via the Enron (and London) loophole played their supportive role. Then the bubble burst thanks to the credit crisis with demand destruction and the exiting from speculative positions by financial investors bringing prices down..."

To read my Minyanville articles including this week's posting, click here