IT TAKES BOTH

If you hang around a boxing gym a while you'll learn many lessons, like it's pretty uncomfortable to get punched in the face.

Not too many investors will recognize it, but that's pretty good investment advice. One has to learn to get comfortable with being uncomfortable. Otherwise, boxing and maybe a host of other sports like football is not your sport.

Here's another way to put it: Some of our worst trades are those we're most comfortable with. If as the saying goes, misery loves company, what's that say about comfortable market positions?  MSM is doing its utmost to convince everyone chasing these minuscule bond yields is the new wave of the future.

The new normal. If you're comfortable with that we suggest you queue up and purchase a few of those low yielding 50 and 100 year bonds governments and corporations are now dropping on investors.    

Deflation is the worry of choice today. Back in the early 1980s it was inflation. And 30-year bonds and CDs, anyone remember them, we're yielding 14-15 percent. There was just one problem, however. Nobody wanted them because everyone except a few liars believed inflation was going to continue its upward surge.

The few who took the other, uncomfortable side of that trade--and there was a few--made fortunes if they held onto their bonds a while. The other side of the deflation meme today is just how dead commodities and inflation are.

And, yes, you can include gold and silver here.

Once those bond yields started coming off 14-15 percent as things changed and new long-term ones yielding 9-10 percent got floated, investors shunned them because they wanted 14-15 percent. In other words, it took awhile for investors to grasp the trend and that the trend had changed.

Since nobody knows for sure where the inflection point is, just as they didn't know then, there's going to be plenty of room for some uncomfortable positions. In the fight game there's no shortage of fighters with balls, a necessary requisite.

But when you get one with balls and smarts, now you're onto something. 

In investing it's no different. You need both.