I see you like to take much out of context. Cheers to you. You claim I point to one data point. In fact, I point to several.
1. All major busts were coincident with economic weakness outside the market collapse. This one occurs with no such thing. Inflation is temperate, and unemployment is low. How's that for more than media spending?
2. All major busts were coincident with a lack of movement on the part of the Fed in any meaningful way. We now have 1 1/2 points in 3 months, to real interest rates that are only SLIGHTLY above inflation. It took Japan 6 years to reach that point when their bubble burst.
3. All major busts occurred in a situation where real estate was vastly overpriced. The US has several SMALL pockets of overpriced real estate, but by and large it has been rising slowly since the 80's real estate bubble burst after the '87 crash.
4. All major busts occurred in an environment which was followed by tightening of federal spending. Based on the current moves in Washington, spending may not rise, but money will be transferred to the populace...a much more effective means of stimulation.
How is that for not relying on a single data point?
As for psychology, you are using a tautological argument with my words. You are saying that because they came from me, they mean what I said. In fact, if you reread my post, which I have stated before you don't do well, I said that YOUR scenario leads to a psychological state of selling begetting selling. That is, the claim (as you did) that you shouldn't buy or hold means to sell leads to a psychological breakdown.
I don't deny that psychology plays a role. Keynes was dead on about that. But to promulgate the psychological condition is something Keynes said was wrong. And your posts imply that engaging in selling is the best scenario.
I disagree that the mistake was the original purchase. That is like saying that, after reviewing all the data, and purchasing my Apple G4 because it was the best computer made (which it is), I made a mistake because it isn't Wintel and nobody is buying the Apple. Simply put...I don't care what others do. And anyone who made the decision I did and suddenly cares about what others think didn't make the mistake when they purchased...they made the mistake when they suddenly cared what other people are doing.
I made a number of those "qualitative" scenarios for your benefit, because it is entirely what you engage in, so I felt I should employ the same constructs you do. The concept that the bear will have arms that I will only see when it is too late is tautology at its finest. I dare you to point to the longest bear market on record and tell me how long it lasted. If you actually do your homework, you should have that answer.
I have responded with fundamentals, because that is what IS the driver of markets. And the fundamentals remain in place. I haven't denied the bastardization of fundamentals during the bubble. That occurs frequently. Look at railroads, radio, and biotech. The dotcoms were that in spades. But the selling is already overdone, and not just because I say it is. Fundamentally, it is overdone. This will show over the next 6 months, not because I said it has been that way.
Should I be wrong...them's the breaks, and I can live with that. I happen to know that, as of now, I am not wrong. All the information I use for macroeconomic analysis remains firmly intact. In order for it to fall apart will require a severe shock, I don't know what it would be...energy, perhaps?....but there isn't one on the horizon at this point. Energy is as close as you get, but I don't see it happening.
Now....if that is refreshingly different, so be it. From what I can tell, it is common sense. I'll take my lumps with it. I've been right most of the time along the way, so I can afford a brief down period. As you point out, I will win in the long run, and life is a marathon - not a sprint. |
