When you’re in business an empirical trait that must be learned, then honed, over and over again, is determining what is truly of first importance – and what falls into secondary, and so on.
Some appear born with this trait, seemingly through genetics or up-bringing. Others acquire it, or learn it, the old-fashioned way. i.e., through forced trial and error aka the required curriculum at the school of Hard Knocks. However, with that said, whether it’s ingrained at birth or learned, regardless of the age, one thing is paramount to understand. As I’ve stated over and over again, the key to its effective usage – is in the honing. The discipline can be learned.
“Gut feelings” are a great tool, but understanding the nuances of what your “gut” may be trying to tell you as in, “Is it the pastrami from earlier, or is this really a bad idea?” is where the real discipline comes in. And that is only done through trial and error, in real-time, and in real life.
You can learn a lot from books per se, but until you apply what you learn in a real situation, with real consequences, the “learning” is nothing more than hypotheticals.
This is why I silently laugh when I’m at some conference or gathering where a biographer, or devotee of some highly regarded figure begins to explain the how’s or why’s as if they’re just a transferable commodity, extrapolated via their research. i.e., They’re now selling a book, about what they read in another’s book, so you may purchase and read it for yourself.
This is the equivalent for creating your own “Instant Guru” recipe. i.e., instead of adding water, it’s a book.
Now don’t get me wrong, books are very important. And biographies (especially biographies) and other non-fiction, along with the entirety of fiction and other genres I enjoy, and extrapolate quite a few useful nuggets from the darndest places or passages.
But again, as I iterated earlier – everything remains hypothetical until one actually applies it then, evaluates the consequences for good, ill, or indifference in real-time and in real life situations.
This is why over the past few years I have written and spoken on the subject of, “Being wrong for the right reasons.” It’s easy to understand the premise, but living through the consequences of that premise and applying it, as well as arguing it, as the world seems to be lined up to throw water (and few other unmentionables) all over you – is quite another. And only those (let’s say most) who’ve been through it can articulate it as to give pragmatic insights that can be assimilated by others to then use as they see fit.
This is the reason why so many “business” or “management” titles reside on the shelves of some of the most incompetent, clueless CEO’s and managers today. i.e., They are nothing more than what I coined “office billboard advertising.” Even if they were read (and I’ve read a lot of them, actually too many of them) deciphering what these so-called “gurus” have deciphered and putting it into pragmatism – is chore I now leave for others. Actually, when convenient, I recommend many of these so-called “best selling” titles to those I see as ether a competitor, or just someone I dislike. But I digress.
Again, I’m not saying all – I’m saying most. The list is far too intricate and numerous as to try to list. (Hint: Want to truly have a grasp of understanding what’s truly important to the core of corporate management? Read all of Peter Drucker’s material and skip the rest. More often than not, you’ll be better off for it.) I know I’m painting with a broad brush here, and some may say even I fall into one or the other category. So it’s not like I’m throwing stones without realizing my own “glass house.”
But this is the reason why I began in the first place, because when I first began traveling down this path I thought I was learning as I read and listened to many (again, far too many) authors and speakers about what to do, what not to do, and so forth. What I learned was that most really hadn’t a clue – they just read – never applied. How do I know they never applied? Easy – they’re gone. i.e., Out of business.
I can not tell you how many times I’ve heard some so-called “investing guru” tout from the stage, or across one form or another of the mainstream business/financial media, the reason why they’re so adept for handling your money – is that they’ve read all of Warren Buffett’s books on investing. Hint: Ole “Uncle Warren” has never written one. So much for all that “insight,” but again, I digress.
Now the reason why I’m asserting the above is for context, because what I want to assert next is not only what I’ll describe as important, but all add it may be paramount as a key identifier for understanding as to interpret what may, or may not, effect your business going forward. They are the two things the entirety of the mainstream business/financial media along with its cabal of the so-called “smart crowd” has been professing for years either A: Doesn’t matter in the larger picture. Or B) Is completely under control and will have little to no impact on the “markets” going forward. I have been arguing vehemently that this viewpoint is irresponsible at best, and outright dangerous at worst.
So with that said let me give you the latest examples as to why you truly need to be paying attention, and the reasoning is simple: The core of the reason behind being “wrong” for the right reasons is showing just how vulnerable the “wrong” may be turned into right. And the implications are legend. To wit:
The above chart is the U.S. $Dollar/Chinese Yuan cross rate as of this writing. The bars/candles represent daily intervals. I opined in a recent article that the “6.70” level was where one should watch to extract any clues. And it was precisely here where the PBoC (China’s central bank) openly intervened and slammed the currency cross downward as to both demonstrate control, as well as possibly scare any shorts out of positions. The reasoning is simple – whether by design as a show of strength, or out of a panic of losing control, you now have proof positive that there is, in fact, a demarcation line that is of critical importance. What you do with that information is up to you, but make no mistake, you now have legitimate proof, made manifest, via the intervention of the PBoC.
Here’s the other…
Again I (and others holding the same viewpoint) have been vehemently marginalized (at least that’s the intent) via many of the so-called “smart crowd” that once the Federal Reserve begins to extract its QE via the asset “roll off” program aka Quantitative Tightening (QT) that the negative effects will be in direct opposition to all the “happy talk” that’s been going on for years as to explain why the “markets” are at such dizzying heights. e.g., “Good earnings, reasonable PE’s, blah, blah, blah.”
My assertions became manifest exactly when I said they would which has now been coined by many in the media as the “February scare” when the markets fell, almost to the minute, the new Fed. chair took his seat.
But as I argued then, it wasn’t him that the market reacted too, but rather, this was when the “markets” caught its first verifiable glimpse that indeed the reduction of the balance sheet had commenced. And with that – the “markets” plummeted. And ever since – they’ve both never fully recovered those highs, and have zig-zagged back and forth between euphoria and panic. Below is a chart as of this writing to demonstrate, again, to wit:
So now I’m sure you’re asking, “So what’s the above got-to-do with the second point, and what the heck is the second point?” Good question, and it is this…
Remember that bit I stated earlier about the “balance sheet” and why it was important? As always, I’d rather let you come to your own conclusions. To wit:
This was reported via ZeroHedge™ just before the U.S. holiday. For those not fully understanding the above here’s what the above shows. Remember that “balance sheet” detail that seemed to scare the “markets” that everyone has said is immaterial? Well, the St. Louis Fed. has decided that it’s so immaterial that they’re no longer going to publish it. Hence the “DISCONTINUED” notification. Funny how that happens right before the QT program is now supposed to accelerate, or increase by over 50%, is it not? (e.g. $30Billion to $50Billion)
Now you have two of what I’ll call extremely important markers to watch for clues. Two, that I’ll also state, the mainstream business/financial media has been absolutely clueless in interpreting. But now, you have proof positive of exactly how important these markers are, for the reasoning is simple…
You know it’s important when either the governing bodies actively demonstrate that “their hands in the soup” – or – no longer want you to see where “their hands” are.
As always, what this all means too you is totally up to you to decide and act on, or not. Which is how it should be.
© 2018 Mark St.Cyr