It doesn't matter in the least what is happening. Again, what is happening is at best miraculous and at worst ordinary. And that doesn't matter. What matters is how people are reacting to it, which is a pure function of their expectations. What is the gap between what is actually happening and what people decided to expect was going to happen? When you know that gap, you know how much trouble people are in, both advisors and investors alike.

What you got caught in here is heaven's own original crisis of rising expectations. Now you can say that all financial bubbles are crises of rising expectations ,and that's perfectly true. This being the greatest financial bubble of all time, it is therefore not insignificantly the greatest crisis of rising expectations, I think. If not of all time, certainly of my career.

Simonoff: So that's really the heart of the problem?

Murray: From every perspective. Why will you go into an office of a financial company and see an advisor energized on the phone, excited about the opportunities, talking to people in a positive way, you know seizing the advantages that always crop up when the mob is terrified? And then go right to the next desk and see somebody who's basically comatose, who isn't moving, who isn't blinking, who isn't making eye contact with anybody or anything and who looks at the phone as if it were a grenade, out of which somebody had pulled the pin?

Why do these two people seem to be in possession of a different set of facts? I would argue that they are in possession of exactly the same set of facts. It's the impact on each of them of the fact that is at issue. And the impact of the facts in turn is a pure function of the difference between what happened and what each of them expected to happen and led his clients to expect or allowed his clients to expect to happen. Expectations are simply the key to everything.

Simonoff: What are the characteristics that differentiate those advisors who capitalize on what we call a post-bubble hangover from those who are simply comatose?

Murray: In a word, it's expectations. What did they tell their clients was going to happen? What did they allow their clients to tell themselves was going to happen? Did they get swept up in this madness or not? Did they give in to the bull market in general, the tech mania in specific and at its wretched excess, the dotcom lunacy? Did they give in to the progressive temptation to underdiversify? Or did they not? How well or how bad off an advisor is today may be a function of how well or how badly diversified his clients ended up at the top. Because, again, even if you were 30% in tech, which consciously or unconsciously you could have been if you owned even something as bland as an S&P index funds, this is a plain vanilla, garden-variety, every five years whether you need one or not post-World War II bear market, which, if you have any perspective at all, bothers you little if any and causes you to think not as a victim but as an opportunist. The point is that people weren't 30% in tech. They were 50% and 60% and 70% and 80% and 100%, and 180% in tech because they were in tech with borrowed money.

Technology did not kill anybody. Underdiversification killed a whole generation of speculators. And the advisors who didn't have the strength to stand up to them.

Eighteen months ago, I sat waiting for a plane and there were four refugees from the cast of Friends standing behind me conducting an intense conversation about the prospects for something called JDS Uniphase. And I mean if God had written on the wall, "Get Out," the message could not have been more clear. And today you walk through an airport and-or anywhere and it's all doom and gloom. It's all sardonic comments about investments and the market.

I saw this movie before. In fact, I've seen this movie you know how many times since 1967. I know how this movie ends.

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