Unexpectedly

News media has started to use a word for anything that is contrarian to the very bullish view that we are back to happy days again. The word is unexpectedly.

There is one hypothesis I will always remember from my studies in literature: language determine our experience in life (linguistic relativity). This little word unexpectedly is added to indicate two things: that market is doing something that we did not expect which means that it’s an anomaly. It’s something we need to fight cause after rain there should be sunshine.

Here are a couple of great examples from the past week:

• Michigan Sentiment Index Unexpectedly Fell in August (August 14, 2009)
• Inflation Unexpectedly Holds at 1.8 percent (August 18, 2009)
• House Starts Unexpectedly Fell 0.1% in July (August 18, 2009)

Just Google unexpectedly and you will find an enormous amount of things that we didn’t expect. How come?

So who’s defining our expectations? If they are always out of whack shouldn’t we just manage them better? Adjust them to the new reality that we live in? Or are our naive hopes for the best just trickling through in the oh-so objective financial news media?

Yann Motte - a french Harvard educated BD manager at Yahoo! - taught me two things ten years back that has stuck with me since then:

• Manage expectations
• Keep your options open

Brilliant in it’s simplicity and something that news media should think about. Any economist worth their $1MM education would know that we are far away from out of the woods. Why not be authentic (honest) and transparent with the people.

I personally expect it to get worse before it gets better. Plan for the worst, hope for the best. :D