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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 461389  
Subject: Attn: Class - Time for Review Date: 2/24/2013 2:04 PM
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Tomorrow, I am having a review session for the Business Law class I teach, for students to review what they've learned so far - in preparation for next week's Mid Term Exam. It seems to me that, as the equity and bond markets hover near all-time highs, it just might be time for the Investor "Class" to do a bit of review, as well.

Given that the markets appear to believe that systemic risk, the TBTF banks, regulation of derivatives, Wall Street reform, and moral hazard all have been "satisfactorily resolved," perhaps a review is not necessary. However...

For those who would like to assess and improve their knowledge of the financial crisis in advance of the next "test" they are likely to face, I recommend a review of the following well-made films, which together present a clear picture of the crisis and should help the Investor Class to assess what they should have learned:

Inside Job
A fact-filled documentary film:

https://vimeo.com/54817244

Margin Call
A fictional (but enlightening) account:

https://www.youtube.com/watch?v=HrT20egtXpw
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Author: namkato Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 416610 of 461389
Subject: Re: Attn: Class - Time for Review Date: 2/24/2013 4:02 PM
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Given that the markets appear to believe that systemic risk, the TBTF banks, regulation of derivatives, Wall Street reform, and moral hazard all have been "satisfactorily resolved," perhaps a review is not necessary. However...

For those who would like to assess and improve their knowledge of the financial crisis in advance of the next "test" they are likely to face, I recommend a review of the following well-made films, which together present a clear picture of the crisis and should help the Investor Class to assess what they should have learned:
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Translation: those of you who are way under invested get an A and those of us who have remained 100% all in for the ride to new highs get an F.

The Glass Is Only Half Full types will ALWAYS overemphasize the negatives and under emphasize the positives. That is the secret sauce of the well known doom & gloom talking heads that get all the attention on Metar. They are appealing to the EXACT same human attribute that all news editors know well: Bad News Sells.

All of your A students can wait until the Editors can't find any more bad news to print. Then you can ring a bell and announce, "The coast is clear now!" They can be the typical retail investor who buys in at the top and sells during max pessimism.

Maybe there should be a class that teaches how to objectively weigh competing and contrasting factors in the decision making process.

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Author: notehound Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 416612 of 461389
Subject: Re: Attn: Class - Time for Review Date: 2/24/2013 4:48 PM
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Maybe there should be a class that teaches how to objectively weigh competing and contrasting factors in the decision making process.

Namkato,

If one objectively weighs competing and contrasting factors with a memory of how we got here and who's still in charge, I expect that, rather that being a straight "buy and hold" investor, one might be wise to consider approaching things more from a trader's perspective.

My recent failures have come from assuming that my investments always will continue "going up." My recent successes have come from trading in and out as the market judges some of my positions to have topped out.

If one views the film "margin call," one will quickly realize that markets in general, and certain asset classes or stocks in particular, can "turn on a dime."

By the way, a lot of insiders have been selling lately. That, among other things, indicates that 2nd quarter earnings may not be as easy to come by as some may think.

It makes sense to keep some powder dry if some stocks or other assets go "on sale" in the next little while.

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Author: mauser96 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 416621 of 461389
Subject: Re: Attn: Class - Time for Review Date: 2/24/2013 9:20 PM
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The market may not believe that thee issues brought up in your post have been resolved for good. Just that they have been pushed aside,kicked down the road, for the nearby short range future. If we knew the world was going to end in 5 years, many people would still be shoving to get all the money they could in the meantime.

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