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I like to start my commentary with an article of general interest, which may or may not be market oriented. Many are topical, preferably without being too predictable, and some are behavioural. I found this article by Susan Cain for the NYT and IHT extremely interesting, and commend it to you. Here is a sample:

But decades of research show that individuals almost always perform better than groups in both quality and quantity, and group performance gets worse as group size increases. The "evidence from science suggests that business people must be insane to use brainstorming groups," wrote the organizational psychologist Adrian Furnham. "If you have talented and motivated people, they should be encouraged to work alone when creativity or efficiency is the highest priority."

The reasons brainstorming fails are instructive for other forms of group work, too. People in groups tend to sit back and let others do the work; they instinctively mimic others' opinions and lose sight of their own; and, often succumb to peer pressure. The Emory University neuroscientist Gregory Berns found that when we take a stance different from the group's, we activate the amygdala, a small organ in the brain associated with the fear of rejection. Professor Berns calls this "the pain of independence."

The one important exception to this dismal record is electronic brainstorming, where large groups outperform individuals; and the larger the group the better. The protection of the screen mitigates many problems of group work. This is why the Internet has yielded such wondrous collective creations. Marcel Proust called reading a "miracle of communication in the midst of solitude," and that's what the Internet is, too. It's a place where we can be alone together - and this is precisely what gives it power.

MY point is not that man is an island. Life is meaningless without love, trust and friendship.

And I'm not suggesting that we abolish teamwork. Indeed, recent studies suggest that influential academic work is
increasingly conducted by teams rather than by individuals. (Although teams whose members collaborate remotely, from separate universities, appear to be the most influential of all.) The problems we face in science, economics and many other fields are more complex than ever before, and we'll need to stand on one another's shoulders if we can possibly hope to solve them.

But even if the problems are different, human nature remains the same. And most humans have two contradictory impulses: we love and need one another, yet we crave privacy and autonomy.

To harness the energy that fuels both these drives, we need to move beyond the New Groupthink and embrace a more nuanced approach to creativity and learning. Our offices should encourage casual, cafe-style interactions, but allow people to disappear into personalized, private spaces when they want to be alone. Our schools should teach children to work with others, but also to work on their own for sustained periods of time. And we must recognize that introverts like Steve Wozniak need extra quiet and privacy to do their best work.

My view - I have generally preferred to work in an office environment, for various reasons including convenience and a degree of communication. I prefer not to be shut away in a room, which can be claustrophobic, but I certainly need my quiet space for thinking and writing, and am inclined to be fiercely protective of it.

Browning Newsletter: 36 Years - New Frontiers - My thanks to Alex Seagle of Fraser Management Associates, publishers of this fascinating and beautifully illustrated letter written by Evelyn Browning Garriss. It is posted in the Subscriber's Area but here is a brief sample:

When is a La Niña not like a La Niña? The answer is - NOW.

An even better question is why is this La Niña not like a La Niña? How long will it continue to be producing such atypical weather? Those questions are much more difficult to answer.

Notice how a La Niña is supposed to shape the winter weather. It is supposed to produce cold wet weather in Western Canada and the Pacific Northwest. The South and Midwest are supposed to be hot. Texas and the Southwest are supposed to be dry while the Ohio River Valley is normally wet.

So far, it hasn't happened. Indeed, during December the weather was more similar to the conditions normally produced by a warm El Niño. Almost all of Canada and the Northern Plains have been substantially warmer than average (>5?C or 9?F) and the Southern and Central Rockies have been freezing, averaging 8?F (4.4?C) cooler temperatures than normal. The Gulf has been as warm as expected, but so has the entire East. The Desert Southwest and Southern Plains have been buried in snow which is great news for drought stricken Texas but very unusual for a La Niña.

So what happened? Scientists have centuries of historical and tree ring data that indicates how a La Niña event affects climate. Why is this event behaving so differently?

My comment - Occasional or new visitors to this site who are not yet subscribers but would like to see an earlier copy of the Browning Newsletter, should click on the 'Search' facility shown in the menu upper-left, fourth item down. Then type 'Browning Newsletter' in the centre window shown, and click on the blue Search button. The September 2011 issue and all earlier issues are now in the public domain.

To review an archived Subscriber's Comment of the Day which is at least four month's old, click on 'Comment of the Day' shown in the menu upper-left and access the 'Archive' link in the centre window. For Audio, click on the 'Subscriber's Audio' link in the same menu shown upper-left.

Tim Price: The final countdown - My thanks to the author for his must-read letter for students of markets and economic theory. It is posted in the Subscriber's Area but here is a sample:

Not interfering with the market's adjustment process is simply allowing Schumpeterian "creative destruction? to operate, and cleanse the forest. But that process is anathema to well-compensated entrenched interests that suckle from the teat of the State. Banks, for example. So while 'laissez faire' would accelerate any banking crisis and shorten the resultant economic contraction, it would reveal the identity of too many naked swimmers when the tide retreats. Instead, courtesy of highly paid lobbyists, we get a long drawn out depression. The example of Japan's zombie banks from the 1990s is still fresh, but ignored in the west.

Rothbard identified the ways in which government can hobble the adjustment process:
1. Prevent or delay liquidation. Lend money to shaky businesses, call on banks to lend further..
2. Inflate further. Further inflation blocks the necessary fall in prices, thus delaying adjustment and prolonging depression. Further credit expansion creates more malinvestments which, in their turn, will have to be liquidated in some later depression. A government's "easy money" policy prevents the market?s return to the necessary high interest rates.
3. Keep wage rates up..
4. Keep prices up..
5. Stimulate consumption and discourage saving.. more saving and less consumption would speed recovery; more consumption and less saving aggravate the shortage of saved capital even further.
6. Subsidize unemployment. Any subsidization of unemployment (via unemployment "insurance", relief, etc.) will prolong unemployment indefinitely, and delay the shift of workers to the fields where jobs are available.

An iatrogenic illness is one caused by the doctor himself. The economies of the west now face policy measures of the sort highlighted by Rothbard that are stated to be in our interests, but which are more likely to do harm to the patient and prolong the recession.

My view - This is one of Tim Price's best-ever issues, in my opinion. I commend it to you.

Additional commentary by Eoin Treacy

Leadership versus relative performance Following a broad market selloff investors and traders are posed with an important choice. Do you seek out the shares which have had the deepest decline in the hope that they are likely to have the largest bounce back, or do you identify the strongest shares on the auspicious that they are leading for a reason and may exhibit more consistent uptrends?

This table of the Nasdaq-100's best performers year-to-date makes for interesting reading. Netflix, First Solar, Sears and Research in Motion are all among this year's best performers so far. They were also among the biggest decliners last quarter. At least in Research In Motion's case there is talk of a takeover but otherwise there are good reasons these shares deteriorated so sharply. The deeply oversold conditions evident last year represented opportunities for nimble traders. However once the short covering has run its course the most likely scenario for the above shares is a lengthy support building phase. Longer-term investors may have a fundamental view as to whether these companies represent value at these levels but they are likely to be in for a wait. The above shares are currently outperforming on an absolute basis compared to their peers but this is likely to be a short-term phenomenon.

Shares hitting new highs or demonstrating relative strength in the midst of a period of heightened investor anxiety are noteworthy. They are clearly outperforming for a reason. Those interested in such companies view broad market trauma as an opportunity to increase their positions. That reflects a high degree of confidence in whatever the investment case for the sector is. Provided they remain consistent with a succession of ranges one above another and continue to find support in the region of a trend mean such as the 200-day MA they are good candidates to exhibit absolute and relative performance into the medium and potentially long term.

This section continues in the Subscriber's Area.

New highs - The number of indices either hitting new highs or pushing back above their respective 200-day MAs continues to increase. National indices hitting new low generally represent countries with the greatest sovereign debt burdens.

This section continues in the Subscriber's Area.

Email of the day - on an addition to the Chart Library:

"Could you please add mgo.ax, marengo mining, which has leases in PNG. TIA."

My comment - Thank you for this suggestion which has been added to the Chart Library.

Speaking engagements in the USA - I have accepted an invitation to speak to the Los Angeles chapter of the MTA on April 11th. The venue has yet to be confirmed but will be in the Long Beach area. Non-members are welcome to attend. The topic will be "To Hoard or to Horde: risks and opportunities from participating with the crowd."

I have also accepted an invitation to speak to the San Diego chapter of the MTA in the first week of April. A date and time has yet to be fixed but it will take place in the Del Mar area.

I still have some space available on my itinerary. If youwould like me to speak to your local chapter or organisation in California or New York please contact your respective chairperson and ask them to contact me.

The Chart Seminar 2012 - Following a sell-out tour to Singapore and Australia last year, The Chart Seminar will be held in San Francisco, New York and London this year. Please be aware that the early booking rate for non- subscribers at the US seminars expires on January 31st.

We are currently taking bookings for our San Francisco and New York dates in April as well as London seminars in May and November. Anyone interested in securing a place at any of our events should contact Sarah Barnes at sbarnes@fullermoney.com.

The date and venues for my seminars so far in 2012 are:

San Francisco - April 16th &17th 2012 Nikko Hotel

New York - April 23rd & 24th 2012 at The Manhattan Club (above Rosie O'Grady's) at 800 7th Avenue

London - May 25th & 25th 2012 at the Radisson Edwardian Hampshire

London - November 22nd & 23rd 2012 at the Radisson Edwardian Hampshire

The full rate is £950 + VAT. (Please note US delegates, as non EU residents are not liable for VAT). The early booking rate of £875 for non-subscribers expires on January 30th for the US seminars. Paid-up Fullermoney subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates.