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When you're an investor, you can look at the quantitative and qualitative elements of an investment, but there's a third aspect: What you feel in your gut.
The moment a large investor doesn't believe a government will pay back its debt when it says it will, a crisis of confidence could develop. Investors have scant patience for the years of good governance - politically fraught fiscal restructuring, austerity and debt rescheduling - it takes to defuse a sovereign-debt crisis.
In the 40 years I've been working as an economist and investor, I have never seen such a disconnect between the asset market and the economic reality... Asset markets are in the sky, and the economy of the ordinary people is in the dumps, where their real incomes adjusted for inflation are going down and asset markets are going up.
I am not criticizing investing in the stock market; I am an investor.
One thing on psychology, which we've always known, is that every investor says they're long-term - and they are until the market takes a hit.
I've learned there's a big difference between a long-focused value investor and a good short-seller. That difference is psychological and I think it falls into the realm of behavioral finance.
An entrepreneur needs to know what they need, period. Then they need to find an investor who can build off whatever their weaknesses are - whether that's through money, strategic partnerships or knowledge.
Having an investor on your board of directors who is naive about public markets or finds them complex or scary is non-optimal.
Guys like me on the investor side are a dime a dozen.
If you're a retail investor, you have set aside some of your hard-earned money for investment or to create a nest egg, for your kids or family.