Читать книгу Beat the Crowd - Kenneth Fisher - Страница 10

Here is the fundamental feature of true contrarianism. If you don’t remember anything from the next nine chapters, remember this: If most believe something will happen in markets, the contrarian simply believes something else will.

This is what the curmudgeons mess up. Note, I didn’t say the opposite happens. Just something different. Markets price in to today’s prices what the crowds commonly conceive. If everyone is bearish because they see bad things, they might be right that they’re bad – but bad might not mean bearish! Because everyone sees the bad things, and they’re splashed all over the TV and Internet, they might be priced in. Those bad things might not matter at all. Or there could be some fundamentally big bad thing they aren’t seeing at all, and things end up worse than they expect!

This is what happened heading into 2008. Then, everyone said housing, subprime and toxic mortgage-backed securities were trouble. They would cause a recession and make stocks fall. So many said it! So many saw it!

No one, me included, saw an even bigger, quiet problem: November 2007’s implementation of the mark-to-market accounting rule (Statement of Financial Accounting Standards [FAS] 157, “Fair Value Measurements”), which could wipe a couple trillion dollars off bank balance sheets globally. No one fathomed that because every financial institution would have to mark every illiquid asset on its balance sheet at the going market price, whenever others sold a mortgage-backed security at fire-sale prices, everyone else would take a hit. Every bank in the US would have to take a paper loss on every comparable illiquid security it owned.

No one fathomed that this could cause pre-existing problems in subprime mortgages to eventually wipe out about 2 trillion from the US banking system in mere months. No one fathomed that the fear over these opaque, illiquid markets could cause markets to deny funding first to Bear Stearns, and then, six months later, to Lehman Brothers, triggering the demise of two of the five biggest investment banks. No one fathomed how the Fed, after lending JPMorgan Chase money to buy Bear, would deny funding to help Barclays buy Lehman, forcing the i-banking giant into bankruptcy. And no one fathomed how this would trigger sheer panic in the markets, making daily –8 % drops seem the norm. Nor that, through it all, the Fed would forget how to function in a crisis, forget to do most of what central banks traditionally did in a crisis (presuming all of that wouldn’t work), forget to boost traditional liquidity by any measure or act as lender of last resort.

If it were just subprime and housing in 2008, we’d probably have just gotten a big correction. It wasn’t until around midyear, as the vicious circle of fire sales and write-downs picked up in earnest, that the real trauma started.

I missed it, too, which brings up the second big rule of contrarianism: You’ll be wrong sometimes. Contrarians know it, accept it. But you don’t have to be right all the time to do fine – a 60 % or 70 % success rate keeps you well ahead of most. As I’ve written in past books, if you’re right 70 % of the time in this realm, you become an absolute living legend. (Although it isn’t impossible that all the snarky new bloodsucking ensures no new living legends ever emerge and endure ever again. Of course, a contrarian won’t care about that – won’t care about self-image. Despite what you may have read of me from my many critics, I care little about my image. Neither should you.)