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Donald Trump and the ‘bubble of doom.’

December 15, 2009

Yesterday, CNN’s Larry King interviewed Donald Trump on the phone:

“What’s your take on the economy?”

“The stock market recovery is too far ahead of the economic recovery.”

Donald Trump became my idol, alongside Warren Buffett, long before he wrote the book  Think big and kick Ass.’ These two giants of investments got what it takes to estimate future earnings. In my 2 books on the psychology of investing I wrote, “Consider taking your money out of the stock market in 2011 or 2012. Why?

If I was only trying to be funny, like some folks on the tube, I would say, “It’s boom or doom, it’s lust or bust. Take your pick.” Hell, nuts, it’s a serious business when hard-working Americans are suffering, while pessimistic CEOs run a weak economy while optimistic investors run a strong stock market:

1. There is no economic reason for the stock market recovery as of Christmas 2009. It is purely psychological, and a ‘bubble of doom’ is forming like a lava dome over a volcano ready to burst. Sooner or later, investors will be ‘busted’ without economic recovery coming in time.

2. Economic recovery will not come in time because Obama is a ‘sweet nice social fellow’ who helps bankers – and ask nicely for help in return – no clout, no understanding of behavioral economics.

3. With no credit because of bankers intransigence, and a looming inflation because of government borrowing, keep making your money with a market ‘exhuberance,’ but be ready to exit before the bubble of doom bursts.

4. I don’t have the audacity to say,  “My books on investing and Obama” have the answer. They don’t. Buffett and Trump can estimate events better, but I am not far behind. 😀

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