Economic Independence Day - Part II
The Law of Identity
On July 26, 2025, Forbes published a review written by John Tamny of my book, The Moneyball Method. It was also published on July 18, 2025, at RealClearMarkets.com. This brief essay will focus on a quote from their twenty-seventh paragraph:
As discussed early in this review, Shupe once again tells readers to “replace the stress and errors of predicting the future and beating the market with the resilience of objective data.” Markets once again predict markets. Rather than trying to pick the best of the future best on the way to market beating returns, just be invested in the broad market indices, including those known to perform best when stocks are known to perform the worst.
“The stress and errors of predicting the future” is loaded with meaning. Stress is caused by contradictions in one’s thinking as they relate to immediate circumstances. But there are no contradictions in nature, so it must be man-made ideas that do not integrate – and their discovery is the challenge. In this case, it’s easy. The future of market performance is always uncertain and the effort to predict rates of return is the cause of the stress. Yet nearly everyone is engaged in that kind of activity, so assumptions must be made that contain potential errors.
The most misunderstood aspect of the opening quote is the “resilience of objective data.” Resilience is the ability to recover from setbacks with relative ease – and markets do that naturally when not subjected to arbitrary force. How is this data “resilient?” It is price information driven by money that is not stupid. It includes all experience.
But let’s define that without contradictions. The objective data is the long-term historical price action that has been tested by skilled and objective analysts. My first source is the Center for Research in Securities Pricing (CRSP). The data results are the median returns, standard deviation, and correlation coefficients that identify the well-defined asset classes. These are the attributes for each category of equities, fixed income, commodities and alternatives.
But because price data is a man-made phenomenon, it will be manipulated by financial “experts” who believe investors are irrational and markets are inefficient. An astute book reviewer on Amazon calls them “magical market whisperers.” Precisely – secular religionists in search of a flock that will pay indulgences for predictions.
That violates the law of identity. An asset class is defined by its nature, not conservative projections or forward-looking assumptions. In contrast, objective investors respect uncertainty and anticipate potential behaviors. To learn more about your economic Independence Day, please click the link below:
https://www.amazon.com/Moneyball-Method-Middle-Class-Manifesto-Objective/dp/1696009111/