Specious Argument

Man-o-man, the market certainly has been on a tear, hasn't it? Every day, the market seems to leap ever higher.

I had expected a much softer stock market, one that is concerned about Bernanke's money printing and Europe's endless woes. Yet, those problems are being overlooked, at least for now.

Despite being surprised by the strength of the market, I have done okay so far this year. That said, had I anticipated this strong upward movement, I would have positioned myself more favorably. However, as I have learned, opportunity costs are far less painful than real cash costs.

Having said all that, what do I expect from here? To be honest, I don't have any strong opinions. Given how surprised I am at the strength so far, I am reluctant to make a bold prediction. Perhaps the market keeps rallying, thwarting all those who are taking a more intellectual and more negative outlook. Or, perhaps, growth isn't all that it seems and the market softens.

I am a huge fan of Bill Fleckenstein of Fleckenstein Capital. He's been bullish on gold and silver and many gold and silver mining companies. Precious metals and mining companies have performed horribly. Even though returns have been poor, I am confident that ultimately investments in precious metals and mining companies will be profitable.

For the past several years, I have expressed frustration with the markets in that they were always being obstructed in some form or fashion. Price discovery has been impaired, and investors are whipped around by political and monetary events. I would love to just focus on companies and strategies. This situation, however, is not likely to change any time soon.

In a prior article I wrote that I was giving Microsoft Office 365 a whirl. Well, right here, right now, I am not impressed. I am not impressed because Microsoft doesn't know when it plans to upgrade my software from Office 2010 to Office 2013. It might be as late as December.

I have been having plenty of discussions with the nice folks at Office 365. They talk about the number of customers and number of servers and all the technological challenges of migrating users to the new Office environment. Only problem is, I don't care about their technical challenges. Microsoft should have addressed this issue well in advance of rolling out Office 2013 to retail clients.

The picture of President Obama and McKayla Maroney is no way connected to Microsoft or Office 365. I just liked their, "I'm not impressed," expressions. That's exactly how I feel toward Office 365 right now. Let's hope that this situation changes soon for the better.

I have been glued to the television watching the latest Fiscal Cliff Developments. I am surprised and dissappointed by the politicians in Washington. This whole mess could have been addressed during the last several weeks or months. I am actually sanguine on the markets, if it weren't for the Fiscal Cliff and upcoming debt limit discussions. So as we sit here early on New Year's Eve, the Fiscal Cliff remains unresolved. Tragic.

Switching topics, I came across a good video that promotes Jack Schwager's new book "Market Sense and Nonsense" - 30 years observing investment mistakes. I hope you enjoy it.

I wish everyone a Happy, Healthy, Safe, and Prosperous 2013.

Although I initially began reading War and Peace (Vintage Classics) in 2007, I only read a few chapters. Then, last year, I returned to War and Peace. Simply put, War and Peace is the best book I ever read.

In addition to having a hard copy version of, I bought the Kindle version too. I found the Kindle version invaluable because I was constantly clicking on the endnotes to read the French translations and other information provided by the translaters Pevear and Volokhonsky. I should note that the Russian text was translated to English and the French text portions were left unaltered. However, endnotes were provided.

Having enjoyed War and Peace, I then decided that I would read Anna Karenina (Oprah's Book Club) (Russian Classics) this year. I did, and, once again, I enjoyed Tolstoy's books immensely.

Rather than attempt to do the book justice by providing my book review, I will instead point to you to Amazon's site where others have provided their input as well as to a Is "Anna Karenina" a Love Story?, an article by Joshua Rothman in The New Yorker. Rothman's review is excellent.

In my reading of the book, I found that Everything has changed, Nothing has changed. By that seemingly odd statement, I mean that communication, transportation, and modern conveniences have changed tremendously; however, people themselves haven't changed at all. We fall victim to the same traps that we always have.

I also enjoy Tolstoy's discussion of those who worked the land and those who worked in the cities pushing paper. Farmers often felt those in the city didn't do meaningful work. And those in the city often felt a special bond with the farmers. I heard those same discussions when working in the oil industry. Those in the field often didn't appreciate those who worked in offices. And those at head office often felt that the field personnel were more honest, direct. Nothing has changed.

The same could be said for the introduction of new technologies. Although the oil industry today is more progressive than it was in the past, I found that many people often resisted new technologies and methodologies. After all, the previous methods worked well for decades, so why change now?

Stepping away from work related matters, I found interesting too that simplicity of design was treasured back then as well. On page 617, Tolstoy wrote the following.

Anna had changed into a very simple cambric dress. Dolly looked attentively at this simple dress. She knew what such simplicity meant and what money was paid for it.

The book is full of parellels to our daily lives, yet this book was set during the 1870s, nearly 150 years ago. So much has changed, yet nothing has changed.

After reading both War and Peace and Anna Karenina, I have come to admire and appreciate Leo Tolstoy. He was truly a genius beyond comprehension. In his books, by touching on a varied array of topics--from religion to sciences--he demonstrated a wide breadth of knowledge. And the books themselves are large and complicated literary works. It's hard to believe in today's cut and paste world that someone could have written such lengthy books.

When I began Anna Karenina, I was unaware of the movie by the same title. Now, the movie should be that much more interesting.

Both War and Peace and Anna Karenina are literary classics that deserve to be read. I enjoyed each of them and plan to read them again. I hope you read them at least once yourself.

I had been reading Daniel Kahneman's book Thinking, Fast and Slow for a couple of weeks and finally finished the book. It's a great book that discusses how we think.

When I took my MBA, I was fascinated by decision theory. I enjoyed learning how we should make better decisions. Given all the uncertainties with a problem, how should decision makers go about structuring their information to reach a logical conclusion?

Then, once I began working as a business analyst, I began using my knowledge. It was helpful to me in arriving at the correct decision and, even more importantly, at communicating how the decision was arrived at.

Because of my interest and use of decision theory, I was looking forward to reading Thinking, Fast and Slow. The first part of the book concerns our fast intuitive thinking compared to our slower, more deliberate thinking. This information was new to me. My prior learning was more concerned with the mathematical modeling of Bayesian Decision Trees.

Next, Kahneman discusses various traps where we often fall victim to making incorrect decisions. Much as we might like to think that we're always rational, we're not.

And last, Kahneman discusses how we think about life. Although I want to reread the entire book, I am especially wanting to reread this last portion.

Although I mentioned Bayesian Decision Trees, the book just makes a passing reference to them. You need not worry about mathematics to enjoy this book. This book is for everyone--I urge everyone to buy and read it. After reading it, you will be more aware of potential pitfalls in your decision making.

I do have one complaint, though. I purchased the Kindle version of the book. In this version, some of the tables and charts are not as clear as they should be. With the number of books sold, I would have hoped that the publishing company would have taken the effort to make sure that the book is properly formatted for electronic publishing. I will likely buy a hardcover or paperback version of this book so that I can read the tables and graphs more easily.

I will provide three additional New York Times links. The first link contains a worthwhile video of a presentation by Kahleman that lasts about one hour. The second link refers to Kahneman's article on the hazards of overconfidence. And the last link points to a book review.

• Daniel Kahneman on the Trap of 'Thinking That We Know'
• Don't Blink! The Hazards of Confidence
• Two Brains Running