The Contrarian In All of Us
Food is the new oil and gold is the new copper and perhaps sugar is the new technology.
Are you a Contrarian Too?
I was always amazed during my visits from Vermont to Wall Street when everyone I met conspiratorially admitted: “We are contrarians too!” Well, if everyone is a contrarian, who are all the other investors and where are their yachts? This may seem like a paradox and it is. But it is a lawful one. Paradoxus means “contrary to opinion.” Every investor is psychological and thus they are, a “contrarian.”
Purgation, Capitulation and Catharsis
Some points of clarification regarding bottom picking. Purgation is the process of expectoration. The acme of purgation is capitulation. It is “the loss of one's head.” This purgation process produces an emptying of all risk appetite. This unpleasant process results in catharsis, which is a state of purification.
Catharsis is required for any new establishment of risk appetite. Purgation, capitulation and catharsis are three distinct sequential stages in risk appetite. Catharsis sets up an enantiadromia.
Did you Get the Enantiadromia?
Enantiadromia is the psychological phenomena of something turning into its opposite: its exact opposite. A bull market turns into a bear market, which is its exact opposite. How and why? Enantiadromia, the law of opposites, is a part of the lawful structure of change. The market has changed and we don’t understand it but we talk and think about it all the time. We opine, project, rationalize, argue and write about it.
The Pharonic Price Profile
You know that some people have been bullish on commodities, but no one has been as bullish as I. What I have been calling the “Repricing of the Planet” is not a normal commodity cycle. It is the greatest move in human history. This is a unique confluence of climatological, geopolitical, demographic and demand factors. Yes, the degree of upside potential in prices is extraordinary. Not even all the way back to the time of the pharaohs has the planet been this stretched.
Food is the new oil and gold is the new copper and perhaps sugar is the new technology. If this is going to be the greatest move in hard assets in history, what kind of move will it be in paper assets?
When answering this question, please keep in mind the old Armenian proverb: "He who tells the truth needs a horse to escape afterward."
Paradoxus is Us
We are all contrarians because we are all psychological. Even Mr. Market is psychological. That is the "Investing Paradox." We are influenced by factors that we do not understand but would like to convince others that we do understand.
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