Broken Clocks and Wolves

A menagerie of analogies: Clocks, Wolves, Foxes, & Hedgehogs. Trying to hold simultaneously contradictory thoughts on current financial threats is really hard. And necessary.

Broken Clocks and Wolves - Audio Version

Investment commentary, and economic commentary, is filled with broken clocks.

By broken clocks I mean experts who have one big idea about what is happening or what is going to happen. They stick to that idea in their every public utterance. The advantage to them is that, like an unmoving analog clock with the big hand and little hand stuck on 10:17, the broken-clock is shockingly accurate exactly twice a day. Amazing! It’s 10:17 again, just as the expert predicted. How did they manage to nail it so precisely? Twice!

So precise but maybe it’s just broken?

And with that magic trick of punditry we forget the whole rest of the time when they were woefully wrong.

If you’re a student of the markets, these broken clocks become easy to spot.¹

Bill Gross (The billionaire Bond King, founder of PIMCO) has been writing highly-followed commentary on the markets for 50 years or so, but coincidentally the conclusion of every single newsletter he’s ever written is that now is a great time to be buying bon…