Send in the Clowns!

14 Mar

In the fall of 2011, I made what is to date, the worst mistake of my professional life.  I had used the education I had on Europe, my experience as a financial expert and the knowledge gleaned from living in Europe and my ability in math to deduce (incorrectly) that Europe and the Euro were about to melt down tragically and bring down the world economy along with it.

Over 15 years in the business, I had never made such a proclamation. I had struggled for the entire summer with my analysis and what to do about it. Make a call like this, get clients out of the market? Well, this may cause panic.  What if I were wrong?

Finally, I couldn’t take it. My conscious was screaming at me. The market had declined by 20%.  If I stood by and watched client accounts get hammered like 2008, what good was I to any of my clients.

Perhaps predictable, from the moment I moved folks out of the market, the markets began to rise. You all know the rest of the story. Sarah and I have spent the last 18 months reconfiguring accounts, getting folks back into markets and portfolios.  It has been frustrating, to say the least.

One question I often get these days is “You were so convinced Europe would implode.  It obviously did not.  Why not? and is it safe now?”

My answer is something like this “I can only say I was at worst, entirely wrong at best, very early.  But only time will tell.”  Europe has been calm.  It has not been in the news. That is, until last week.

It would appear the calm was fragile.  The Italians, in their wisdom, have decided to elect a felon and a standup comedian to replace Mario Monti, the technocrat who has tried his best to lead their nation back to a prosperity and away from a financial tragedy.  To hell with that, they said.  Bring in the Clowns!

To read more, enjoy this Economist Article

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