I think you make the rational case, but not the conventional case. That's my point exactly: rationality almost always trumps conventionality, because conventional thinking is full of irrational platitudes, repeated sound bites, etc. to keep the masses pacified while the real doings are happening.
In all my examples I pointed out how rational thinking leads one to see the probable outcome in unique situations and to make the correct decision, where emotional or irrational or conventional thinking leads to fear and greed and ruin.
If, as you say, conventional thinking led to the conclusion that Fannie and Freddie were going to survive and thrive, this stock would already be north of $20 a share, because the conventional masses would have piled in.
No, the conventional masses will wait until the press and politicians pronounce everything is just hunkey-dorey and then they'll pay the $20 per share.
MB
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