Karl Denninger's Half-Year Checkup

One of the most vocal in the financial blogging world is Karl Denninger, who runs tickerforum.org. He is pretty bearish on the US economy, and has posted his half-year checkup on the markets. Karl makes very interesting points, especially in the last part about money management. Here're some excerpts:

"...For most, if not nearly all, people who are in the market they have absolutely no business trading actively. This is particularly true in markets like this, where 2, 3 even 4% swings on a daily basis have become commonplace. While the last year has seen these be nearly all upward, the last few weeks and months has seen it be nearly all down.

For the long term investor the point is to wind up with more money than you started with - in purchasing power - over a 10, 20 or 30 year horizon. You cannot afford big mistakes as they will force you to take big risks in order to recover, and if you're wrong on the latter you will wind up with a destroyed account... "

"...The key to making a true fortune in anything folks is to buy smart - not sell smart. This is something I've learned through my entrepreneurial affairs... If you buy smart, making money is easy. If you have to sell smart you're always one mistake away from massive losses and potential bankruptcy. Nobody is good enough to bat 1,000. 600, 700, sure. 1,000? Nope. Not unless you're God - or are cheating...."

"There is no reason in a deflationary environment, which we are now in, to add beta to your long-term funds. The cowboys who want to do that with their entire net worth are welcome to it - you'll still have a place to live when they blow up and are under a freeway overpass. Most of them will - indeed, while there is always someone who claims to have "nailed it" ex-post-facto for each big market move, you'll note if you bother to view things through an objective lens that 100 people had opinions prior to the move and only one of them still has an account with a positive balance in it. Worse, that person's prognostications for what's to come next are almost-certain to be dead wrong."

Here's the link to the entire post. Enjoy :)