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Turning points

There hard economic indicators and soft economic indicators. Hard indicators reflect calculated data, where soft are typically surveys or opinions, not based on facts. Very few (if at all) have predictive power, and yet, we look at history to see similarities and then extrapolate into the future. Cover magazines could be included in the soft category, and have had a great contrarian predictive track record. The death of equities or dot.bomb, among others, saw the light at turning points. The phenomenon is based on the natural tendency of the human mind to extrapolate a trend. And typically, confirmation sets in our minds at the end of the trend. This weekend, Barron’s cover (below) says high interest rates are here to stay, and neutral rate could be higher than 2%. If the contrarian track record continues, rates will start falling soon.

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