|
Those who are under 50
years of age must read
the history of
markets to learn about the days when markets
fluctuated based
upon fundamentals and technicals. Only
those over 50 experienced those days. |
|
Fluctuating markets that are rational are even more remote and
historic. When those old-time rational markets fluctuated they
remained in ranges that were as impossible to predict as
markets always are, but
they had anchors. Their anchors were
founded in rational behavior. These anchors include yields,
P/Es, and reasonable performance within
their specific industries. |
| In
October, 2007, we experienced the final, last, and
harshest death scream of
the Reagan bull market. Now we know exactly when it was born and how
long that bull lived: Born: August, 1982 -
Died: October, 2007. |
| The
Reagan bull market enriched the world, the United
States, millions of people around the
world, and provided for vast development of science,
industry, and all individuals who desired to work and achieve. |
| But in
its generosity the Reagan bull market
created two generations of spoiled, arrogant, overly-empowered
narcissists who consider their successes
all their own doing. The bull made it too easy. The bull failed to
teach its beneficiaries that bull markets
do eventually die and leave people to wait
sometimes long periods before another bull can incubate, develop,
and be born. |
|
Specifically, the bull failed to teach its followers that not always
is every pull-back, down-turn, and retracement a buying opportunity.
Eventually, one day the drop in valuations is the start of a
down-trend. |
| Down
trends have a name: Bear markets. |
| Both
market forms -- bull & bear markets --
have common features. The relevant common feature for survival
following what could be a change of trend,
or buying opportunity, is to consider the
mass psychology of market participants, the
investor class. |
|
| Today's
market down trend was initiated by a confluence in long-term credit
turning sour and the ascent of a socialistic US government. |
|
Each and all conditions prevalent in
today's markets follow from these two
macro events. Neither of these events will be repaired or replaced
in the near nor intermediate future. |
| These
macro events and the resultant forces have
broken investor mass psychology. |
|
Investors know the inevitable results of
socialism. |
| That is
why today's markets contain few buying
opportunities from which profits may be reaped
relatively soon. This applies to nearly all types
of assets including real estate, stocks, antiques, paintings, and
more. |
|
|
Youngsters, today you are out on your own to learn how to survive
with bear in his market. He may live a long, unprofitable life. |
| Be
cautious, grasshoppers. |