A Totally Different Perspective

As someone striving for intellectual honesty I am amazed at how we confront moments of truth when we least expect it.

In roughly 2 weeks time we will be lifting the lid of our new startup and start talking openly what we do and why we think we are bringing a fresh approach to an old problem.

The story behind the subject starts yesterday with me spending most of the day with a friend and advisor who occupies a unique position in the market we are looking to compete in. Because of my friends industry knowledge I was more inclined to consider what he had to say.

Vladimir and I have spent many hours discussing our business model and a few weeks ago we finally locked down our way forward, or so we thought. Enter friend X and his idea of a 180 degree switch to our business model with the prospects of making more profits in a shorter time frame and the result is one helluva confused set of co-founders.

So Vlad and I started talking but our heads were spinning we just couldn’t get a grip; we launch in 2 weeks and here is a proposal that will completely change the message and approach we plan to launch with. This is when intellectual honesty and the genuine pursuit of it comes into question. Vlad and I really gave this new approach very serious consideration.

We have finally decided to stick with our intended value proposition which might not be as profitable in the short term, but it represents our value system and the idea of disrupting the market with genuine innovation and giving as many people as possible the benefit of this innovation and giving us much lower exposure to conflicts of interest.

This leaves us as both richer and poorer, which aligns nicely with my Kabbalistic and Jungian principles of uniting opposites.

Housing Regret

Property is the national religion in Australia. Remember this is a country that has gone more than 20yrs without a recession. Remember Australians call this place the “Lucky Country”. Remember the Austrian business cycle? Well the central banks the world over would have us believe that the business cycle is no longer the force it used to be.

Today I am not going to rant on about the impotence of the central banks ability to create the stability they believe is vital to the economy. My thesis as an Austrian and as a Jungian is that the business cycle cannot be eliminated because it is natures way of dealing with excesses and inefficiencies, and slipping my Jungian hat on, the interfering with the natural order causes a displacement of the equilibrium of the psychic energy in the actors making up the economy. This displacement is what I call the “market complex”.

Zoning into my subject line. From my observation deck there is an almost hysterical narrative in the daily media relating to the booming residential property market. It is on everybody’s lips and I mean everyones. Property is flying and there is an ABSOLUTE belief that property can only go up which is creating this self-fulfilling feedback loop where people are too scared to miss out and therefore will do anything to purchase a property.

The thing is the economy is really not doing well, yes there are pockets of prosperity but with the drop in many of the core commodities making up our resource economy this has put a significant break on the economy (despite the weakening currency). Retail is doing it tough and wage growth is simply not keeping up with the cost of living. Unaffordability according to my index not the ones concocted by government mandated statisticians is growing so many of the factors required to support this dramatic rise in residential are simply not present. I see one factor doing all the heavy lifting and that is the artificially low interest rates the world over. The minute you manipulate the driving forces influencing the market you introduce the prospects of a Complex. As Jung describes the complex as a force that can erupt at any time with an intensity that is directly related to the psychic energy it constellates.

We arrived in Australia as a family in December 2007, and our extended family who had converted to the Australian property religion told us “you have to buy immediately”. I resisted and in April 2009 when the Australian property market was experiencing its first modest pullback in 30+ years I bought a great property in a good deal. The market stabilised and started climbing again and it was all happy days. My wife and I saw great potential in our large by Sydney North Bondi standards 5 bedroom house to apply for a rezoning and develop 2 smaller modern semi-detached homes on our property. It took us almost 2yrs from start to finish to get the zoning and archetictural designs to our desired standards, and then the market was soft. In all the time we had lived here it was the most negative people had been on property and the market was incredibly soft. The agents we were speaking to thought we could just get our money back despite an approved “DA” on the title deeds.

Certain things came about regarding the development specifically and my business life in general, then we were offered a great price in the current market by a developer and my wife and I decided this was a message and we should take the deal which included a nice profit on the 2009 purchase despite the costs incurred so we sold and became renters. There is no doubt that our decision was the responsible one at the time; however, I would be lying if I didn’t say that I don’t feel a certain amount of regret with the benefit of hindsight when considering how much money we left on the proverbial table. In fact the reason why I know I have developed a “complex” about this is because I can identify how my body and mind react when the subject of residential property comes up for discussion.

U.S. Housing Price Index Since 1900

In conclusion, I am a student of economic history and while I may be wrong on my timing, what is a decade here or there, I believe I will be right in the fullness of time. As you can see in the chart above residential property markets enjoyed uninterrupted positive growth of more than 100 yrs in the USA; cycles like this have a way of imbedding neural pathways into ones brain and psyche that one cannot even contemplate something to the contrary, this in my opinion is what has happened to the Australian psyche.

I am not predicting a complete bust, as there are many positive demographic drivers that will help support the property market at an unknown equilibrium clearing rate. However I will continue to stick my neck out and say that the current levels are unsustainable.

Can you Intellectualize Emotions

Before discussing the subject line, I just wanted to update you on the performance of the Sefirot Freestyle Fund. I remain very satisfied with the progress to date, and the fact that we are not making money in the current environment doesn’t bother me in the least. It does however confirm to me that managing a fund with other peoples money using my style is an exercise in masochism in the extreme.

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INSIGHT:

Yesterday in therapy I was discussing a lucid dream/feeling that has come and gone for the last 10yrs with my Jungian analyst. I raised the image/feeling not knowing exactly where it was coming from and its meaning. Dr Andre being the expert he is helped me connect the dots.

I have been intellectualizing a particular relationship lately and have repeatedly admitted that it doesn’t bother me because I know its for the best. In fact I have been quite proud of myself for being able to rise above the situation and do the “right thing”. However, this is where things get interesting as I have been experiencing these lucid image and emotional flashes and couldn’t see that in fact my unconscious was telling me that no matter how much I intellectualize the experience the emotions are real and need to be felt. If you ignore these repressed unconscious emotions then they will erupt to the surface as a complex.

I feel a million times better that I have zoned in on these feelings and now that I am acknowledging them I am feeling more centered.

This insight is equally applicable to the markets. There is no way to ignore the emotions driving the markets the primary emotions of fear and greed need to be “felt”. However, the world we live in today with news coming from every angle and mavens in their thousands writing on blogs (just like me) trying to explain each and every new data piece and its significance, are doing the markets in their genius a disservice. The market and her participants need to feel! We intellectualize emotions at our peril with market complex eruptions the likely result.

Take a step back from the markets and look at what possible emotional message could be communicated to you. If you do and experience the balance of intellect and emotion then you are likely to be in a much happier safer place.

 

The Rise After the Fall

Today I read an absolutely brilliant article about Frank Lowy and his greatness.

I want to relook at my post yesterday which cast Frank’s fall from grace in a negative light, and give it a more positive spin. The article I read today which resonated strongly with me spoke endearingly how once again Frank picked himself up and carried on with his never say die attitude.

franklowyfall

Most 80yr olds who take a fall like this, assuming they survive, usually spend the next few months in hospital. Well Frank gathered himself and within a few minutes was back up on the stage presenting the trophy. The following day he was nursing a bruised shoulder but otherwise in good shape. Now that is either very lucky or exceptionally tough. I will say it is a combination of both!

The takeaway for me from these two posts is to be careful not to fall into the trap of looking for major pivotal moments that are under heavy archetypal influences. The temptation is to see it as a fall from grace, as its theme fits so well within the context of archetypal moments. Then it can be followed like today’s positive post as another step in the Hero Archetype whose never say die attitude keeps being invoked in major archetypal type themes like falling from grace on the world stage only to pick oneself up.

We can draw the very same parallels when analyzing the markets. For instance in today’s context with markets at all time highs. The market commentators/researchers who have a bearish bias are looking for any archetypal sign to pin the TOP to, but just like I was quick to make the call about Lowy yesterday, today I am seeing his fall in positive way and far from calling it the end it may be the beginning of another reinforcing story of triumph which could be the same in the market context.

In order for one to draw conclusive inferences from archetypal type events, one needs to see clusters of complexes reinforcing the message of the influence of the prevailing archetype. Just like markets at different time intervals display sometimes contradicting messages so to with archetypes. On a 10 minute bar chart the market could be bearish whereas on a daily chart it could be extremely bullish. So when making calls on archetypes one has to also determine which archetypal force field is dominant at a particular time. For example a person may live their life like Frank under the influence of the hero archetype, however there may be shorter moments or periods where the innocent archetype is more dominant. The question one can then determine when taking a more macro view of the persons life is what archetype best defines this persons character through their life.

 

No Interest

I so despise the current markets where risk takers are being rewarded with puny returns relative to the HUGE risk they are taking, yet the common wisdom is that the risks are actually very small when central banks have your back.

I have never deleted as many macro market commentaries from my inbox, even the newspaper and my favourite blog sites cannot shake the malaise and contempt I feel for the markets and her participants.

I have been here before (a couple of times) and I know how quickly the inspiration and passion will return when I see/feel some sort of equilibrium return. I have no interest in changing the fabric of the tapestry I have designed as my capital world view.

I am a contrarian with a highly activated warrior archetype force-field. I write this feeling proud of this “affliction” but caution myself not to become too identified with such a polarizing force as it can be highly destabilizing.

Suffering has made me more connected

It dawned on me yesterday while talking things through with my guru that the suffering I have been going through the last few months has made me more connected to my creator.

No parent should see their child suffer, for me and my family the last 8 months has been a terribly painful experience that at times has felt like a never ending nightmare. To add to that I have encountered extreme volatility on the job front, with my income being sporadic to say the least.

However with all this negativity and dare I say it “suffering” I have consciously experienced and felt emotions on a very deep positive level; this is where Jung’s uniting of opposite’s plays an interesting role. By exploring my pain I have actually become more connected to its source and while the pain is still their I am able feel a deep level of acceptance at the same time.

When one is cruising through life and things are going swimmingly it is very hard to experience things on a deep level. Laughter, fun and frivolity are superficial experiences, there is nothing wrong with this, but it is very hard to grow in such an atmosphere.

On that philosophical note, I am more than happy for all the suffering to stop 🙂

Ego Attachment to what we Read

I just picked up a book for my 15yr old daughter from the library. I needed some help from the librarian and then as I was leaving I said to her, “I have to tell you the book isn’t for me but my daughter”. Why did I say that, why was I worried that she would judge me for reading this genre of book?

The book was a fantasy book called Allegiant by Veronica Roth, hardly something to be embarrassed about? On some further reflection I always bring a book from my considerable library to the synagogue to help pass “slow” phases (what can I do, I love to read), and I always place the cover of my books face down so that others passing by don’t get to see the title of what I am reading.

My choice of books is certainly not in the mainstream and is of a very esoteric nature in many instances, which I guess makes me a little self-conscious. I don’t necessarily want to be associated as that loopy mystical guy, yet in many instances it is something I strive for.

Coming back to why I needed to say to the librarian that book is for my daughter; I think the books we read are a window into our soul, and strangely I was worried about what a women who I have never seen before might think about me. At this stage I have no fitting answers, to why I care.

I do however feel that what we read is a very important insight into who we are as a person. I only hope that I have a different view of judging a person by the TV they watch. While writing the above in a “free association” mindset I realize I think I have answered my own question within a Jungian persona point of view.

Like the persona we share with the world in terms of our personality such as extroversion or introversion, we are doing the same with the books we read and the TV we watch. If for instance most of the books I read are academic in nature then I am probably projecting an intellectual persona to the world. Therefore when I checked Allegiant out I suddenly felt a tension between the persona I project and this caused me enough discomfort/embarrassment/insecurity to try and justify it as in an ego defence.

As a student of the psyche this insight and my willingness to go deeper into the complex allows me to bring to consciousness something I didn’t realize was affecting me unconsciously. These insights are incredibly powerful as they help us bring to consciousness why we are feeling like we are feeling.

Today I am feeling anxious because I requested something very important from someone. I didn’t quite realize how deeply this important request was affecting me, through this seemingly innocuous statement to a librarian I have now placed my emotions in context. The need to protect my ego helped me see how much of my ego is attached to the request I made and how vulnerable I feel. What to do with this knowledge? I am not sure exactly but just realizing that I am anxious and why is actually powerful knowledge and is already causing me to relax 🙂