Fool`s gold

GUEST COLUMN

We are not in times of mess. We are in times of unprecedented mess. Not because people have lost lot of money, but because loss is messy, loss of jobs, loss of a house, loss of a client, loss of purchasing parity, loss of belief and confidence.

We also lost benchmarks about what market acumen really means. Is it about J P Morgan's quantitative skills costing taxpayers millions of dollars or about Northern Rock, the smart bank of United Kingdom which went bust? We are just witnessing economics the way Elliott once described, "Laws of economics are as they should be, ruthless."

And if you think flunking finance will teach us, you are mistaken, the fool's gold is a mirage which will continue to occur with cyclical precision, just a few learn, rest perish. Abraham Lincoln said, "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time."

Markets will thrive till it can fool all the people some time. Markets have to live you see, so it will keep fooling a few of us all the time. We at Orpheus know that the challenge is to be fooled less, as it is human destiny to be fooled sometime, as you cannot fool the market all the time.

What gold is doing now, seems another mirage that could surprise us in the short-term, say more than a few months. A few weeks are enough for markets to destroy 80 per cent of wealth. It took three years to destroy 70 years of wealth creation from 1857-1929.

But, what we are talking here is about