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Wednesday, August 11, 2010

Investment Advice (Not Mine) - Taleb Says Government Bonds to Collapse, Avoid Stocks

Nassim Nicholas Taleb, who warned that unforeseen events can roil markets in “The Black Swan,” said he is “betting on the collapse of government bonds” and that investors should avoid stocks.

“I’m very pessimistic,” he said at the Discovery Invest Leadership Summit in Johannesburg today. “By staying in cash or hedging against inflation, you won’t regret it in two years.”

The financial system is riskier that it was than before the 2008 crisis that led the U.S. economy to the worst contraction since the Great Depression, Taleb said.

In February, he told a conference in Moscow that “every single human being” should bet U.S. Treasury bonds will decline. It’s “a no brainer” to sell short the debt, he added. Since then, 2- and 10-year notes have rallied.

So explain to me how "investing" these days is different than "gambling"?

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