Model Portfolio timbo56:SSOF1

Arthur Schopenhauer (1788 - 1860) stated, "All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident."

How very true this is. When I told folks back in 2001 that the price of petroleum was going to rise, they ridiculed the idea, then many violently opposed the notion, now people take it as self-evident that this was bound to happen.

But that is just an example, and not my central point here. Why do people do this?? I think it is to avoid mental dissonance. When something new is first proposed to be true, (e.g. Einsteinian physics, the Big Bang Theory, Evolution) it is likely to conflict with present beliefs. That causes conflict inside the minds of those who hear the new message. They don't like it. People have a strong distaste for mental conflict. That bears repeating, people have a strong distaste for mental conflict. I think that is what the Thirty Years War was all about.

What does this have to do with Marketocracy??? Marketocracy causes mental conflict. To those who believe that all actively managed funds are a bunch of hooey, it is just one more managed fund with a lot of big claims, that are all going to turn out to be nothing. For those who have their money socked away at Fidelity, it is just not going to make sense that people who are not with a big-name, well-established, long-history, big-money, blue-blood, ivy-league mutual fund organization could possibly do better than those who are. For those who work at Fidelity, it might well be infuriating that anybody who is not at a big-name, well-established, long-history, big-money organization and who does not have blue-blood and did not graduate from an ivy-league school could possibly think that he or she could pick stocks better than those who do and did.

But the Marketocracy performance is starting to all add up.

So get ready to start saying that it was self-evident all along, all you big-name, well-established, long-history, big-money types. Yeahhhhhhh, I mean you. Hey, what are you doing reading this anyway, if you are so confident it is all a bunch of hooey.

Timothy Siegel