By Bill Bonner
This post Memorial Day appeared first on Daily Reckoning.
“Fortune is rightly indignant at those who break with the customs of the past.”
— Winston Churchill
My calendar says that today is the day traditionally set aside to remember those who fought in America’s wars. Not one to trifle with tradition, I will do so.
The contrarian insight is a traditionalist’s one. Certain market relationships have endured for many years. The relationship of price to earnings, for example. There is no law that says P/Es can’t be higher…or lower…in the future. But the person who bets that they will be substantially different for a very long time is taking a big risk. He is betting that something fundamental has changed…maybe in the value of capital, or perhaps in the nature of man. Perhaps capital will be worth more in the future than it has been in the last 100 years. And maybe there really will be a New Man with different attitudes towards time and money.
But the odds of there being something really new are slim. Between phases of manic euphoria and manic depression, things tend to regress to the mean — that is, where they traditionally have been. And the mean does not change often or quickly.
I have compared the manic phases of market history to the manic phases of political history. Normally, people live with a bit of violence in their lives — murders, assault and battery, riots. And occasionally, full-scale wars break out. Even then, they are usually contained within “normal” bounds.
The Yanomamo Indians practice a form of institutionalized savagery in which they beat each other over the head with clubs until one dies or passes out.
The Greek city-states met one another periodically in an almost ritualized, and deadly, shoving match. If they had actually wanted to destroy the enemy town, they might have assaulted at night, burned the towns and slaughtered the inhabitants. Instead, they formed up neatly on a level field and marched towards each other.
On some occasions, armies would wait patiently for their enemies to form up — including a delay for a distant town to bring up its troops. It wasn’t proper to go after an enemy before he was ready. Even if you won, it would not be a victory you could enjoy. Dishonor was, after all, worse than defeat. “Come back with your shields,” said the Spartan mothers to their sons, “or upon them.” Don’t run away, in other words.
Today, we honor those who did not run away — those who faced the mania of war…who did the right thing and had the right stuff when it was needed.
Flamm Dee Harper had to struggle to raise the American flag in …read more
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