No, that is not a typo. For 2008, one theme we believe will prevail that does not focus on any particular investment, but for an investment philosophy is "Long Nouns, Short Adjectives". What does this mean? The job of an adjective is to modify a noun. More generally speaking, an adjective describes a noun and/or adds to the overall understanding of the noun. In practice, adjectives add a layer of bullshit. My 12th grade English teacher told me to strip my writing of adjectives to make it more clear and concise. Adjectives add a "fluff" factor that the uneducated find appealing, but the educated find annoying and disconcerting. To those who really care, abundant use of adjectives signal to a reader that the author is trying to cover up some sort of shortcoming.
Applied to the investment world, this means to go short any fund, product, or stock that uses adjectives in its marketing strategy. For example, you have funds that are named the "ABC Fund Family Premium Diversified Strategic Enhanced Dividend Fund" or the "Premier Global China Opportunity Fund", sell those funds and buy dividends and China. Usually, these adjectives are used to make something that is more or less an index, or something that is a pile of toxic waste look more marketable - especially to the retail investor who must choose between an index and a flashy fund. In a time when volatility is low and greed is high, the bullshit factor works as there is ample liquidity to go around. When liquidity becomes scarce it becomes bullshit-averse. In 2000 and 2001, you saw the bullshit that CEO's of tech companies be valued much less by the market than it was years prior. It is a historic cycle that bullshit is most expensive at the top and cheapest at the bottom, as public's tolerance for bullshit is greatest at the top and lowest at the bottom.
For 2008, adjust your tolerance early, and go short adjectives and long nouns. You've all added adjectives to your term paper to get it to the 10 page limit to "fool" your professor, so why let someone add them to your investment portfolio in order to "fool" you.
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