Weighing Both Sides of the Story

We have learned in life that there are usually two sides to every story, which holds true for our personal lives as well as for investing and the economy. If you focus on only one angle, you're playing the game with one hand tied behind your back. Charlie Munger, Warren Buffett's partner and Vice-Chairman of Berkshire Hathaway (BRK.A), often likes to say, "Invert, always invert." I believe what Munger is suggesting is that when looking at making an investment or assessing the stock market, you should always consider both sides of the equation.

For instance, many analysts and economists cite the growing numbers of college graduates choosing to migrate back home to live with mom and dad instead of living independently a strong indicator that housing will remain weak for years to come. As a result of that migration, the economy is suppressed because fewer people are shopping at Home Depot (HD) or Beth Bath and Beyond (BBBY) or calling the cable guy to for cable installation. The argument is valid as these events are indeed having an effect on the economy....396 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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