Day 953 - Day 443 - May.27.21 - It’s fun to be wrong

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It’s fun to be wrong. It’s fun to be challenged and have your beliefs questioned. What you know to be absolutely true is not true. My favourite example Naval cites where if you take a piece of paper and draw 2 dots on it, most people think there is only one way for the dots to connect - a line between the dots. But those people would be wrong. What if you fold the dots over each other? It shatters people’s beliefs because what they know to be true is not. Today I heard a podcast with Stanley Druckenmiller and he said in ‘07/08, they were worried about inflation but it never got there because the market collapsed. Because the market collapsed, the money disappeared so inflation didn’t become a problem. Deflation was the problem. With how much money this government has printed, the asset bubble is going to burst spectacularly. In the short term it's disastrous for countries socially and politically but it’s healthy for countries and markets to evolve. It’s just part of the economic cycle. The thing I missed was during big crises like the Great Depression, it was a deflationary environment because the market collapsed causing people who own stocks to hold cash. Holding cash decreases demand, which increases supply meaning prices go cheaper. For the longest time I went with the herd and believed inflation was coming but I think I’m wrong. Inflation is here and deflation is coming. Sometimes everything you believe to be true turns out to be a lie. Good, it’s better that way. Understand reality for what it is and not what you want it to be. Keep learning!