Irrational Panic

Got back to my previous posts, especially the ones prior to March 10 (all links in this post refer to my previous posts). Some friends called me crazy when I suggested the DOW could jump by over 1,000 points in a week. Well, let’s put it this way, three weeks ago, if you were told to invest in the DOW and you will be gaining over 20% on your money in less than 3 weeks, what would have been the answer? Would you have seen the pendulum overshooting? Most people would have refused to believe it. That's the inverse of a Black Swan, or what I am calling a White Swan. That’s exactly what happens in a bubble (in this case the bubble is inverted).



This recent run might not be the comeback, but it is proof again that the market is governed by irrational emotions and that your business needs to profit from this downturn to ensure readiness for the tsunami effect.