THE AGE OF BUBBLES

The Wall Street Journal’s Gregory Zuckerman recently observed that we are in an age of bubbles, citing housing, energy, Asian currencies and technology stocks as examples of bubbles the market has experienced over the past decade and noted that short-termism is driving a dangerous approach to investing

"The next bubble may be emerging markets, Brazil, China, or pockets of real estate in Asia or Australia Everyone are worried about the next investor. There is an incentive to increasingly pile on trades and now it is much easier to express trades using ETFs, synthetic CDS and other types of derivatives. Managers today are fully invested and talking about adding leverage, but they don't really believe in the long term nature of these investments. It might work out in the short term but long term you wonder if they can all get out."

I’ll tell you now Greg, they can’t - and with the volatility and the risk in markets a lot of people are going to get squashed picking up nickels in front of Bulldozers when the big crowd try to crush towards the small exit doors. This is a year when more than ever there is a real premium for expertise and knowhow. Second best and amateur investors are cannon fodder if they can’t expect the unexpected.