The Best Investing Advice: Common Sense

As a card-carrying grizzly bear who views the investment/economic world as a glass half-empty, it is hard for many to understand why I try to capture countertrend rallies in both bull and, particularly, in bear markets.

I do it for the following reasons:

• My day job is managing two hedge funds, and I scratch and claw to register profits for my limited partners regardless of the external environment.
• While I always develop a baseline market expectation (hopefully, through logic of argument and analytical dissection), I am often wrong, so it is helpful to have hedges.
• There are always sectors, groups and individual equities that run counter to the primary trend; there is both a bull market and a bear market somewhere at all times.

Remember when you are reading and viewing the self-proclaimed brilliant bullish/bearish commentators, many of whom are often wrong but nearly never in doubt, to balance their views and arguments with your own common sense.

Reject any strategist/analyst who comes across with a smug certainty of opinion and fails to qualify his views with words such as "will likely," "probably" and "might."

You see, no one knows for sure. The investment mosaic is not linear; it is multidimensional and often hard to gauge, especially during the great debt unwind we face today.

Come up with your own independent decisions, and remember that convictions are for convicts.