Thursday, October 23, 2008

Don't Buy This Book (Not!)

Being a successful contrarian is the ultimate revenge. Let me give you an example: as little as a year ago none other than Alan Greenspan kept singing the praises of credit derivatives, while yours truly was calling them for what they proved to be: a man-made disaster born of greed.

Was Greenspan unintelligent (to put it mildly)? No. He was just going with the flow, joining the rest of the inside-the-box thinkers. Sad, for a man of his obvious smarts. And was I so smart? No. I was just willing to go against the flow, willing to Think The Opposite.

So, here is a book that I think EVERYONE should read. It is smart, humorous and EXTREMELY useful (cheap, too). You can read it in 30 minutes (lot's of pictures, small format), but I promise it will be the most profitable half hour of your life. And I bet you will keep it close by in times to come.

In fact, I think we should all buy a few dozen and hand them out as Holiday presents this year. I know that's what I'll be doing.

Whatever You Think, Think The Opposite is written by Paul Arden, a former executive creative director for Saatchi & Saatchi.

Here's an excerpt, apropos of Messrs. Greenspan, Paulson, Brown, Sarkozi, :

"TRAPPED. It's not because you are making the wrong decisions, it's because you are making the right ones. We try to make sensible decisions based on the facts in front of us. The problem with making sensible decisions is that so is everyone else."

So: Don't Buy This Book, will ya?


Anonymous said...

Great book Hell. Years ago I was taught this idea in High School by my football Head Coach who taught Philosophy as a senior elective. History is filled with examples of contrarian thinking breaking through dogmatic,stagnant ideas. Sadly, many of these ideas receive harsh treatment and even if correct are not accepted until much time has passed. Applying this kind of thinking, I have made many life-changing decisions. Of course one can have wrong ideas at times, but contrarian thinking is like a stream of fresh water that keeps the pond fresh. It helps prevent us from becoming automatons mindlessly following the programs that are handed to us. Thanks, Hell, for being one of those fresh streams!

shtove said...

Didn't Seinfeld get there first?

"George Costanza Does The Opposite" (3:04):

erdosfan said...

Must be something in the air:

LordSidcup said...

You're right about Arden's books. They are totally shit, some tricks of copywriting turned into a philosophy of life.

Everyone sees themself as amverick now. Probably all those wall streets saw themselves as Clint Eastwood in High Plains Drifter.
And now the town burns.

I didn't like your last post on rgem. though. I found it overly smug.

Anonymous said...

Something must be wrong with me because I never saw you as a contrarian. I never saw the people on the Housing Bubble blogs or Nouriel Roubini as contrarians either.

I simply thought there were a lot of stupid people in this world. Well, that's not quite true either. I thought there were a lot of lucky (those who got in early) and stupid (those who got in late) people in this world. And then there was the rest of us who missed out on participating in the whole "housing bubble" thing.

There was always a significant population saying "What are these people doing? Lending money to people with no money or job to buy a bunch of houses? And then betting that houses will go up forever?" I mean, I understood this.

I was shocked and amazed that Alan Greenspan said he didn't realize it when it was happening. Was that a joke or what? I mean, C'mon Alan. House prices don't grow to the sky. People without jobs or with ordinary jobs can't pay $8K a month in mortgages. I mean, Alaaaan (whine here), what did you think when you read about that 21-year-old in Forbes who owned something like 30 houses WITH NO MONEY DOWN...? Don't you realize that you were the enabler? You fed drugs to a drug addict. That was a young man addicted to buying houses and your remedy enabled him to keep getting high on buying houses.

Anyway, I don't see any of us as contrarians. I simply think we were too smart to be dragged into the whole stupidity of it all.

I never owned a pet rock either. :)

Anonymous said...

I do not think it helps to just say "think the opposite".
In the case of the credit / housing bubble, what helped me was to read many sources and considering the facts.
I think for anybody to read Robert Shiller's book "Irrational exhuberance" back in 2005, 2006 for example, or this blog for that matter, would have given you lots of good input to counterbalance the mainstream media hype about credit and housing prices appreciation.
I don't think to just blindly think the opposite of most people does any good in itself.

How about historical evidence, logic, rationality, and sketpicism towards 'authorities' in genereal (govt, fed. reserve chairman, credit ratings agencies, media like cnbc, wsj, ft, and many others) ?

Anonymous said...

It's called the school of counterintuitivism. Sort of, a flock of Black Swans.

Best regards,


dearieme said...

Years ago I pointlessly read a book when it's title said all that you need: "95% is crap".

dearieme said...

"its" title: bugger!

Debra said...

Somewhere apparently Keynes said that it was better to follow the crowd than to be against it. In reference to the markets.
I think I can understand this.
Thinking, I mean, really thinking, and not just thinking the opposite puts you in a really lonely place because sooner, and not later, you realize just how few people are really doing it. It is really really uncomfortable being in this very very lonely place.
Fortunately for many of us, the Internet has taken care of this problem, as we are not as lonely as before...

Along the lines of contrarian thinking, I have noticed : the increasing absence of stairs in any form whatsoever, their function being totally taken over by escalators.
I hate escalators. I think that they are greatly responsible for obesity in the U.S.
I always take the stairs whenever possible.
Just to insinuate a little grain of sand into the "system" (and believe me, the system exists, once you start looking for it. It can be seen underneath the construction of our society towards its ends of SPEED, POWER, etc.)
So... no contrarian books for me. I don't need them.
Suggestion : Bernard Maris's books "Antimanuel de l'Economie", Volumes 1 and 2 for those of you who read French. Maris is very much a contrarian, but a really brilliant one. A contrarian economist. Refreshing !

x-loan said...

I always save my money because we never know what will happen in the future.

Debra said...

Another reason to resist contrarian thinking :
mixed in with all the incredible alienation and decadence that our culture has managed to generate since monotheism crowded out other belief systems, the culture is actually attempting to heal itself :
i.e. : nostalgia for 60's phenomena which is dismissed and poo-poohed by many cynics as sheep like, is actually an attempt to return to that point in time in order to bring about a new revolution in the way we think.

Edwardo said...

Let me put it another way, because this is not about contrarianism per se, but rather about genuine thinking as opposed to groupthink(ing).

Someone once said, "When everyone is thinking the same way, no one is thinking."

There were very good reasons to object to the financial machinations that carried the day a mere few years ago, but engaging in just a reasonable amount of critical thinking on the subject, which you did, was all that was neccessary to reveal the hollowness of the practices that are now literally and figuratively bankrupt.

And finally recall the wisdom of George Soros who observed (and here I paraphrase) that financial trends are built on demonstrable falsehoods that one rides for a time, but abandons before they are inevitably proven frauds.

Much in life is like that I'd say.

As for Greenspan, he may be smart, but he's never
been deep. And thrown into the bargain, his ego is enormous. In the aggregate, Greenspan did far more harm than good. His legacy is one of failure.

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