Maurice, well you've been doing your econ homework quite nicely and now know as much as anybody in the field. It's really a nutty profession, as they are wrong more often than the weather guys and still make zillions of dollars to predict the future. Nobody crunches more numbers and devours whole forests with computer print outs than the econometric boys--yet they always seems to come up just a wee bit shy. Currently, the folks with the highest batting average hail from the Andersen Business School at UCLA. Their forecasts for the California economy have been remarkably good, but then one of those Yins or Yangs is always lurking just around the corner.
You are quite right that it is entirely possible to ride out the bumps and as long as you don't get thrown off the pony: common stock owners will beat bond owners every time. At least in the 20th Century, every method of measurement you can shake a stick at will demonstrate superior returns for common stock.
But [you knew there'd be a but didn't you?], very, very few folks can buy and hold. They buy the Mighty Q @ $70, Korea-gate comes along and they get bombed 30 points, and they're outta there. It's a bitch to go to cocktail parties and talk about your 50% losers. I'm currently sporting a major hickey with LSI for example. Quit visiting the LSI thread and quit looking, which is dumb but I am trying to avoid bringing the pain to the forefront, to forget it so I don't sell it now, which is dumber.
All of which brings up the old joke about statistics [in the long run we're all dead]. My little 1929 $ vs. a 1998 $ is absolutely true, but that's 69 years later, which is a lot of water under the bridge. So if you don't lose it to a margin call, divorce, bad vibes, your friends laughing at you, your wife yelling at you, and oh yes the company you've invested in doesn't go BK, and you hold it for 69 years then you'll have the last laugh on the guy who bought T-Bonds in 1929. I CAN PROVE IT TO YOU, but it tends to be less than worthless if you can't make it meaningful to your investing strategy. So ride those waves my friend, and don't get tossed overboard.
P.S. Since you said some very kind things about my ranting, I have instructed Ramsey to drop me from the class action + his lawyer's fees looked a shade on the high side. Would you now kindly begin a new round of shameless hyping on LSI, please? This thing gets any lower they're gonna take it in the back yard and shoot it. :( SM |
