Michael,
I started my investment career in a Southeast Asian economy which was in a recession for over 10 years with 30 day treasuries above 20% for much of the time and the manufactured inflation rate, which contained components subject to rigid price and wage controls, was in double digits for the entire time. Suffice it to say, the stock market, which was relatively shallow (less than half Intel's current market cap), was in a bear market of major proportions. One of the things I learned about human nature was that there is some weird scapegoating shit that gets slung around in a bear market especially as the bottom keeps falling off. Just when you think you've reached bottom, wham, you slide down some more. I believe at or around the nadir of that market, some brokers 'disappeared' apparently on the orders of powerful men who got burned by some pretty bad stock picks.
That was a bear market in a 3rd world country so who knows how the bear, if this is one, will work out in the world's largest economy, which is going to be importing deflation of historic proportions. Just be careful and scale your moves whatever you do.
Best of luck.
Gus |
