As somewhat "smart" but small individuals like us

,one of our winning edges (if any) resides in shortening period of denial. It is easy to say in a few words. However it is very difficult to do due to human nature and ego. Everyone has ego. Those intellectual people who have been spoied from elementary schools to PhD degrees are even harder conque egos. Unfortunately, our winning edge really resides in shorting period of denial relative to average market responses. We do not have a team to do market reseach dedicately. It is rare or even impossible for us FIRST to recognize a coming trouble or properity or any significant turning point. Even though some of us do have intuition to first "feel" that something might go wrong,we are not confident enough to convince ourselves. However, you do not have to be the first group of elite/genius people to recognize a change. As long as you are not the last few batches of people who finally wake up after most other people wake up, you could still be a winner or be at least a loser with less amount of loss.

The subprime problem is clearly an example.

1) In early March, this issue came out ==> few people believe it.
2) A couple of month later, bank starts to write down losses ==> still most people think this is a tiny issue (remember that article written by a layer, economist and something else (3 degrees/titles as far as I remember)
3) a another couple of months later, big bank starts to write off big ==> some finally wake up, probably most are still in denial. Market rally after 8/16/2007 re-ignite most people illusion – the problem is over.
4) Another few months passes, another around of write-offs.
5) Nonetheless, as I pointed out a while ago, this problem is not over until we see big insurance companies and pension fund collapse since they are the major terminal players in the value chain. AIG is starting to have problem. One pension fund in Florida was reported to have significant problem.
6) After a few more months, the real bottom is probably near, provided that we do not have a non-trivial recession. However this is a big IF.

We are not smart and/or confident enough to figure out big problem when time was in 2005. However, if we end period of denial in step 2, we are still a winner. Is really that difficult to be someone in step2? The answer is YES if ego controls someone’s mind. The answer is NO otherwise.

Now, we are in another challenging period of denial. Is US economy really heading for recession? Do you want to be the last group of Mary and Joe who wake up after everybody else runs away? As I said a while ago, the US core business has been in recession for a while (pharmaceutical, financial, manufacture, major transportation, retails and services). The only ones which remained robust were a few high tech companies as evidenced by their sizzling stock price (google, apple, rimm) at that time. What do they look like now? 50% off high? Do not get me wrong. I am not wishing for a recession. However, I believe a recession as a result of free market movement is really necessary to kill dysfunctional things and we start another cycle again. I have been as frustrated as Jim Rogers with this government intervention and the way they intervene. Their job is really to protect market normal movement, not to print money endless to solve short term problems. Their job is to protect dollar and promote employment. However, as some people pointed out a while ago, if the government is doing this for political reasons (let other nations to pay our big hole etc. ) which only a few persons know in the world, I have nothing to say but to bless there is no another 9.11.