Misleading Beliefs

"The most important part of this story is getting our minds to accept reality without our passionate beliefs interfering. By ‘beliefs’ I mean statements like these:
•“Things always get better and are never as bad as they seem.”
•“If Peak Oil were ‘real,’ I would be hearing about it from my trusted sources.”
•“Dwelling on the negative is self-fulfilling.”
While each of these things might be true, they also might be false and therefore misleading, especially during periods of transition. Our job is to remain as dispassionate and logical as possible."
Chris Martenson

Fear, Uncertainty, and Doubt

"Fear, uncertainty and doubt will remain as long as consumers and executives lack confidence in the economic outlook of the United States. The psychological affect of the FUD factor remains a major hurdle to overcome. So far, everyone fears the worst, is uncertain about the future and doubts much can be done to make the situation better. We are in for a slow growth economy for some time. As investors we need to adjust our sails to deal with these difficult conditions."
Hans Wagner, CEO, Trading Online Markets LLC

Mass Social Mood Model

Waves and Mass Social Mood

Robert Prechter is the promoter of R.N. Elliott’s “Elliott Wave Theory”. It’s too technical to explain briefly, but essentially he believes that markets progress in waves and are directly tied to human psychology and the brain’s limbic system. His books, “At The Crest of The Tidal Wave” and “Conquer The Crash” are very insightful. His main thesis is NOT technical at all. He believes that “mass social mood” fluctuates in waves. Through history, herding human mammals go through cyclical optimistic and pessimistic mass mood shifts. When we’re happy and greedy, we drive financial markets upward and we’re predominantly peaceful. When we’re angry and fearful (now he says), we crash financial markets and start wars. He believes that financial markets are merely BAROMETERS of mass social mood. He believes that happy people buy stocks and the price rises versus believing that rising stocks make people happy. He’s coined the term “socionomics” for this psychological phenomenom.

His two websites are:
http://www.elliottwave.com/
http://www.socionomics.com/

Some excerpts from his books:
"Only a true understanding of the nature of people's behavior as it relates to markets will allow you to reason through emotionally charged situations and deal with them properly"
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 161

"Even at this early date, we might speculate on just a few developments that appear likely. For instance, I would be inclined to expect that the Middle East and Latin America will destabilize;....wars will erupt in Asia and the Middle East....foreigners will commit terrorist acts on U.S. soil"
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 435

"So what is the right course of action? The Elliott Wave Theorist cautioned in early 1986,'Once the craze really takes hold, just be aware of what is going on, and make sure you are not caught up in the amorphous feelings of confidence, complacency and love at the ultimate top.' The reader of this book faces a difficult task, one that will put him in such an extreme minority that he will feel isolated and unsupported. By selling all of your stocks, you will take the maverick road, and you will take it alone. I have no doubt that by the time this bull market is ending, our call for a huge crash and depression will be laughed off the street. Do not lose your perspective when the time comes. It will take great courage to make money during this bull market. However, it will take greater courage to get out near the top, because that's when the world will call you a damn fool for selling."
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 217

"Collective man will enjoy the same successes and repeat the same mistakes over and over, with minor differences in specifics, throughout eternity, although each time from a higher level of advancement. Mistakes are repeated not because people fail to learn from history, as many contend, but precisely because they do learn from history, from recent history, their own experience."
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 20

"It forces the analyst to look at the big picture. A proper long term perspective elevates the wave analyst above the cacophony of daily news. It provides the opportunity to make sense of the great trend changes in markets and dramatic social events that accompany them."
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 12

Prechter’s outlook for many many years has been massive deflation as in the Dow Jones Industrial Average equaling 700. Yikes! His theory is that everything crashes: stocks, commodities, and the economy. Associated with that is major strife across the world including major military conflict. Not the option we hope for. He was “dead on” with 9/11 and Fannie/Freddie.