Mark Twain on The Consensus

In navigating the investment world we find it useful to be the master of the consensus rather than slave to the same.

Here’s a real life example. Early Q4 we predicted vigor in the economy. Most forecaster were looking the other direction. They got caught with their pants down. Now they have swung in the extreme, most predicting results for H1 that even we find excessive.

Fascinating stuff this crowd behavior is it not? Let’s return to Mark Twain’s Dr. Loeb’s Incredible Discovery for some fun. Twain begins: “...in the drift of the years I by and by found out that a consensus examines a new thing with its feeling rather oftener than with its mind. You know, yourself, that this is so. Do those people examine with feelings that are friendly to evidence? You know they don’t. They do the examining by the light of their prejudices – now isn’t that true?”

He continues, “..you wonder that the consensuses do not go out of business. Do you know of a case where a consensus won a game? You can go back as far as you want to and you ...will find...for your guidance and profit: Whatever new thing a consensus coppers (colloquial for ‘bets against’) bet your money on that very card and do not be afraid.”

Indeed, Twain reminds us, “There was a primitive steam engine – ages back: a consensus made fun of it. There was the Marquis of Worcester’s steam engine, 250 years ago: a consensus made fun of it. There was Fulton’s steamboat of a century ago: a French consensus...made fun of it. While a consensus was proving, by statistics and things, that a steamship could not cross the Atlantic, a steamship did it. There was Priestley, with his oxygen: a consensus scoffed at him, mobbed him, burned him out, banishing him. A consensus consisting of all the medical experts of Great Britian made fun of Jenner and inoculation.”

“This is warm work,” Twain complains.. ‘It puts my temperature up to 106 and raises my pulse to the limit. It always works just so when the red rag of consensus jumps my fence and starts across my pasture. I’ve been a consensus more than once myself, and I know the business...”

Twain had a second career in the making.

Robert Craven