Old men writing newsletters about "battening down the hatches" and "the New Normal" hear about something called Groupon being worth $5 billion and automatically assume "Bubble" because the company doesn't assemble aircraft carriers - they can't wrap their heads around the hundreds of millions in cash flow being generated by a web-based startup with almost no employees, physical real estate or equipment.
Mohamed El-Erian probably made over 500 TV and radio appearances in 2010, not once did he tell you about Redbox ($CSTR). Or Netflix ($NFLX) or IMAX ($IMAX). Or Ugg Boots ($DECK) becoming a perma-brand like Nike. Or Green Mountain Coffee ($GMCR) becoming the new Folgers. Not once did he mention the fact that fashion and entertainment defy the business cycle and that teens will find a way to spend on new stuff - even against a backdrop of 21% unemployment for their age group.
3. Equity Mutual Fund Managers:
They're all over TV and print again, and what's worse, their confidence is back. They're crowing their successful investment stories again as the painful memories of 2007-2009 begin to fade. They must be ignored at all costs. They will make projections about cumulative annual growth rates for their portfolio holdings going out 5 years. They will use these projections to justify high valuations and performance chasing. They will smile at you through their makeup from your television screen as if they are 95% long because of a Sixth Investing Sense that only they possess. This is not the case.
