Totally my fault for making investment decisions based off of pretty much just a blog. Too funny, and lesson learned, hopefully– the first of many.

I applied a different lesson, and it worked. Back in late 2006 when Roubini was spouting “CRASH CRASH CRASH” I believed him but I applied the lesson of only putting less than half your chips in the market on any prediction, then wait and watch. Only increase your bet when the chances have significantly increased that your original prediction is correct.

I waited and the market showed Roubini’s timing was WRONG, yet with the markets moving even higher it made his prediction even more likely because he was right about markets having zero support from economic conditions.

So by Oct ’08 the markets were sitting – insanely – at 1550 (S&P500) and 14,000 (DOW). I understood those were completely IRRATIONAL valuations given the incredibly poor economic conditions, and crest of the housing price Tsunami.

Those valuations made a huge market correction even much much more likely, than was the case in late 2006.

Nothing in the market is certain, but some anticipated market inflections are nearly certain and you don’t want to get rattled by the “noise” and miss such opportunities. Oct ’07 was certainly such a golden opportunity where a downturn was inevitable. That was the “best odds” I’ve seen on a play in the market in a very long time.