February 09, 2009 at 6:00 am by Kevin Grewal
When something fails and crumbles, there is always a pessimist that says “I told you so”. Now that we are able to look at back at the beginning of this financial crisis, there were several telltale signs that indicated that the stock market and some exchange traded funds (ETFs) might have been over inflated and due for a decline.
How could we tell which ones or how much of a decline to expect? After all, we are only human and not telepathic. Even the best of the best make mistakes.
- Peter Schiff read the financial industry like a children’s book, but was drastically wrong when it came to his predictions on commodities, his position on the U.S. dollar and his forecast of the stocks of developing nations
- The famous Warren Buffet made errors by heavily investing in bank stocks and sold an immense put on the market thinking that it would bounce back to its 2007 highs within seven years
- Ben Stein’s own take on Merrill Lynch, believing that the financial giant was a sound investment – and we all know what happened to it
In a nutshell, there are no crystal balls or miracle workers. Sometimes, we all like to wish that we are immortal and all-knowing and don’t want to accept the fact that we are only human. For this reason, we don’t like to predict the future.
Instead, we utilize trend lines instead of trying to guess what’s going to happen in the market.
Tags: ETF 101, Financial, Trend Following
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