A note worth reading from a friend
kinda pertains to the bear cave...
>>>>
Sue,
I do little short term trading any more. Too risky, too frothy, too many people trading having no idea why stocks go up or down.
Makes research of not much help.
The game has changed almost to a form of "musical chairs", Russian Roulette, Greater Fool Theory, Ponzi scheme, etc., etc.
Nothing to do with investing, value, DD, anything that I grew up on.
Better to play what you know. Or not play. I'll let those wild eyed momentum guys make all the money here and just wait for the tables to turn, as they always do.
I remember how momentum worked until about 1968-70, then they took all those guys money away who thought it was an investment strategy that never ended. Then it didn't work well until the early '90's.
When there was a whole new generation to "train".
Everything cycles. Everything. With stocks being the most obvious example. When this one ends they'll wipe out everybody. Even the people who were out at the top. They'll get back in too soon.
Like every other cycle. Being 50 and watching closely since I was a kid means I've seen all this before. And read about the times it happened before I was born.
Please don't think it won't end. Your 401K at work will take a 50% hit, at minimum. Since this is the most frothy cycle ever, probably much worse. 50% would be an average drop. The biggest ones have been 75% to almost 90% down.
Over long periods. Everybody today is trained to hold on, right?
No inflation, low interest rates and unemployment, strong economy, what could go wrong? (Most of that)
But we in the US are in a exciting era! Best of all worlds! New paradigm!
Someone explain to me how Europes markets are all setting all time records then, and why Asia's were before the bottom fell out last fall. I thought WE had the new paradigm!! Europe has slow economies, double digit unemployment, social welfare states. Yup. It's the money!!!! Greenspan, the Germans, and Japan have all been "pump priming" for years. Printing fiat money.
Used to be they would occasionally put on the brakes and slow things down well before a speculative bubble could become a problem.
Not this cycle................. They let it go. Used none of the tools available to them.
Why? Hate to speculate for fear of sounding paranoid.
Could easily just be that governments are inherently stupid. The Japanese are using strategies that failed here in the 1930's to try to get out of their economic troubles.
Greenspan was not nearly as highly regarded as a private economist as he has become as Fed Chairman.
Could be a plan? The 30's depression was used to force the welfare state and the UN down the throats of Americans.
What would they want next? I won't say.......(the paranoid thing)
Sorry for rambling, I know you didn't ask. But I thought I'd take the opportunity to warn you of what might happen to your "nest egg".
As to what I'm doing. Actually doing well with my mining stocks. BMG and HL.
The metals had an 18 year bear market. Is it over? I think so, but at least I'm 18 years from the last top. By the way, at that top gold and silver were going to go up forever. I remember argueing with those people.
Buying physical stuff,too. Silver coins, etc. Cheap. (value!) Sorry for the book.
Dwight |
