The world is moving faster and faster to a situation where events can seem more like a black swan than ever before, and where things that did not seem to affect6 us, now do so. It is not news that the internet and globalization have changed how we operate financial markets and how companies do business. It has also changed how fast markets can be impacted by things that not many years ago would take time to be fully known and work though the system. On any morning we all can know what is happening in whatever meetings various governments in Europe are having with each other or with the ECB and IMF. Decisions made in Spain in their morning are well known before you even go to the office in the US. Traders have London offices which are already trading positions before things get underway in New York. Because of instant world communications, currencies move rapidly and interest rate decisions in Brazil, the ECB or Japan have instant impact.

The point of all of this is that many investors are getting overwhelmed by the flood of information and the speed at which it is coming. Nobody is an expert in currencies, bonds, commodities, oil and whatever else all at the same time. There is simply too much to know and far too much to keep track of. As a result, many investors are looking for something that is a reasonably stable source of decent yield and relatively unaffected by the worldwide maelstrom that will continue well into the next few years. Whether it is war in Iran, Syria exploding into Turkey, Greece dropping the Euro, or China and Japan having some sort of confrontation over some islands, investors want to have ownership of things that go on regardless of who is president. The one thing that overrides all else if bought right and leveraged right is real estate.

The stock market can swing widely in an instant with 70% of trading being done now by computers and not on fundamentals. A computer glitch can cause firms to nearly go out of business in hours, or a flash crash. They can also cause public offerings to get so badly executed that tens of millions can be lost because Nasdaq doesn’t have a computer system that is designed properly to cope with this high speed world. Over the long haul it may have risen by 7%-8%, but this is not the same market it was over generations until the past few years. Humans no longer trade on fundamentals for over 70% of trades. Bonds have got to fall over the next 5 years and very likely over the next two or three. The 30 year bond rally is over and some investors are going to suffer very major losses because they don’t understand how the bond market works when rates rise rapidly.