The Investment Scientist

Is the Sky Clear Enough Yet?

Posted on: June 28, 2013

Wise words written by myself two years ago: “The whole idea of investing only when “the sky is clear” is flawed. When the sky is clear, it can’t get any better; you can be sure another storm is brewing just beyond the horizon.”

The Investment Scientist

[I wrote this two weeks ago.]

On September 12, a client of mine called me to get out of stocks altogether.

He used a vivid analogy: “The storm is raging; I will wait until the sky clears before I get in again.” The storm he referred to was the European debt crisis. Judging by my many interactions with investors, he is not alone.

This morning, I woke up to great news: the Europeans have finally hammered out a debt deal in which Greece only needs to pay 50% of what they owe to the banks. With this debt reorganization, it looks like we will not have a Greek default (even though this is really a default by another name, but that’s the subject of another piece).

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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.


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