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3/21/2005
Disillusionment, by Victor Niederhoffer

One of the things we've all noticed in day-to-day living is how serious the hatred and backlash can be against someone who was previously considered a hero when it is discovered that he is human. Such a tendency in human nature should be quantified. And applied to such current heroes as the Sage. When people discover that sitting on "$43 billion in cash because he can't find enough cheap stocks to buy" and being 10% invested in equities in a two-year period when stocks went up 50%, or "staying with simple investments" and "stocks you can understand" (not anything more complicated than lawnmower or typewriter) isn't good in a year like 2003 when tech was up 50%, or for that matter when Nasdaq hits 5000 again; why, what a fall.

Another area of disillusionment comes when we find that someone is a faker trying to invoke false modesty on us. In Ed Spec I outline the forecaster who talks about his track record and seemingly is modest when he says "We erred in silver - we said a high of $420 but it hit $415. It turns out that actually ... ". It is the same with the Sage. How long before people realize that when he says "I struck out in 2004, falling half a percent short of the S&P 500 return of 10.9%" that the message is "how much smarter I am than you"?

George Zachar adds:

Wonder what the Sage's psychological pain threshold is on the $ trade? With a new meme - "Europe abandons pretense of fiscal honesty" - he would have good reason to be very concerned about his exposure. Not to mention all the little fish piggybacking him...

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