re: unless you were in cash all of the 1990's
Yeah, that's the rub. A lot of people who have done well in 2000 and 2001 (by being short or in cash or in "value" stocks), missed out on the whole 1990-1999 bull market in techs. And the things that have made money, or just preserved capital, in the last 2 years, will stop working at some point. And FA doesn't seem to help much, to tell when it's the right moment to change strategies. FA got me out of CSCO in March 1999, which was far, far below the top (but higher than today). At the bottom this September, valuations were still too high, using the LT ranges for things like P/S, PE, etc. TA helps some, but only some, serving mainly to confirm what my gut is telling me, and to warn me if I've guessed wrong.
What I've found works the best, is to buy on despair, and sell on euphoria. I gauge the consensus sentiment, and go contrarian at the extremes. I bought heavily in late September 2001, and in October 1998, because it "felt" like investors were "giving up". Flows out of stock mutual funds is the best objective measurement of this, that I've found.
I'm not a Permabear, although it can seem like that for long periods. Anyone who has read my posts over the years knows I was 80-100% tech for years, up to January 2000, and used LEAPs and margin liberally, and had 100%+ returns in 1997, 1998, and 1999. |
