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To the extent that you have erred in the underlying assumption, and/or misjudged the probabilistic consequences of this war, it may be the sellers who are rationally responding to the risks, while the buyers looking beyond Saddam are trading on the emotions of hope & greed.

The tendency to polarize market participants into two camps is an interesting one. The underlying truth is that there are both buyers and sellers who are rationally responding to the risks, and both buyers and sellers who are trading on emotions of hope and greed.

Another important thing to remember is that just because your decision turns out to have been unprofitable doesn't mean that it wasn't rational. Solasis often posts probability-driven analyses that do not offer certainty of success, but do offer high probabilities of success. If you happen to hit the outlier and lose, that doesn't make your decision irrational, nor does it mean that you shouldn't do exactly the same thing next time.

Lastly, I find it increasingly interesting that in the same way we were told in the late 1990s that this time was different and the bull market could continue indefinitely, we are now being told that this bear market is different and will go on indefinitely.

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