Perception Is Reality

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Aug 17, 2011
Doug Kass recently opined in his piece that Buffett Seems Bothered citing “But, by his generally optimistic standards, he appears to be getting somewhat more nervous. Buffett's phrase — "that feeling can create its own reality" — which, upon reflection, seems to jump off the New York Times editorial page. It seems Buffett, too, is cautioning with regard to the risks associated with an acceleration in the negative feedback loop that I cited in Monday morning's "Thrown for a Loop."


Perception is reality. As I have written in my earlier piece on George Soros and the Theory of Price Reflexivity, “…that implies a self-reinforcing boom and bust pattern, i.e., prices do influence the fundamental and change expectations thereafter through price dynamics.”


Which brings me to the next point on Soros’ interview with German publication Der Spiegel which can be accessed here Soros: Crisis Not Over with few salient points for the reader to mull over.


The current crisis in Europe is a continuation of the 2008 U.S. crisis rather than a separate event and it is far from over, according to billionaire investor George Soros.


But the European Union must act as one, according to Soros, by issuing its own bonds--Eurobonds--guaranteed by the Union as a whole rather than individual countries.


The only solution, according to Soros, is for Germany to take the lead.


"There is a mysterious buyer that keeps propping up the euro," he said.


The next seismic shift may be on the cards with the negative reinforcing cycle of boom, bust and blame. But then again, perhaps Darwinism will prevail and we may pull ourselves out of these stronger than ever. The key takeaway here is to position yourself for next great opportunity to buy stocks on the cheap, as we exit from this bipolar market milieu.


Note: Italics copied in verbatim