OK, I’m going to take a wild guess that you are, as I am, an engineer. You’re accustomed to the nice, clear, unequivocal natural laws under which we must operate, and their harsh (deadly) penalties for violations (or attempts thereupon) of said laws, right?
Either that, or you a physics jock.
So which is it? Because I have to give you a pep talk, and I want to know how I should slant it.
I’m a Civil Engineer. I see everything in black and white. No gray area.
I see the stock market in fundamental terms, and while I clearly understand that the market can trade technically based on human psychology, I always fail to account for that and only look at the fundamentals.
A perfect example is the housing bubble. I expected a collapse in 2004 because the fundamentals just didn’t support the prices - way out of line from incomes and rents. As usual, I failed to understand the psychological aspect of people’s greed during a bubble - that very few of them study and learn the underlying reality like I do.
One of my GREAT weaknesses is thinking everybody is as analytical as I am. As a result, I end up being an outlier, saying that we are heading for a depression two years ago, while most here were listening to TV talking heads and parroting the V-shaped recession. Just as now most people here mistakenly think that Obama is the reason for the depression and Republican governance would magically buoy the economy back to the good old days.
I am studying and getting more sophisticated, but in the end, I still can’t shake my engineering mind-set. You remember that we were taught that all problems were solvable. 2+2=4, and there was no interpretation or spin.
I would say the biggest difference I find between the engineering mind and others is that where most people will ask “can this be done”, an engineer will ask “how can this be done.”
“Can we put a man on the moon”, vs “how can we put a man on the moon.”
“Can cars get 100 mpg”, vs “how can cars get 100 mpg”.
“Can we fix the economy,” vs “how can we fix the economy.”
You are an engineer so you know how I approach things. Very analytical. Very black and white. There is no gray area. We are either inflating or deflating. The depression will either be inflationary or deflationary.
I’m not mentally equipped to handle subjects dealing with human psychology, which is a critical aspect of economy, finance, bubbles, booms, crashes, etc.
I could use your help.