AR, The odd thing is how similar this mania is to the 1960s scams. You know, "color t.v. is growing exponentially forever and Zenith should be selling for 100 times earnings." <G> So much is the same that it is hard to pick the differences. But here are some:
1. There is no war. Yet. So young folks are able to earn money and invest without worrying about the draft.
2. The fund managers in the 1960s, though a scummy lot, were infinitely smarter than the current crew. At least they tried to figure out what a stock was worth. But momentum was rampant then as it is now.
3. Global investing was unheard of in the 1960s. So, this time, you have to look worldwide while in the 1960s, overseas stuff, outside of Vietnam, didn't matter much.
4. There is much less wealth creation, on a % basis, this time. In the 1960s, the bull ran for so long because a great percentage of investors seriously enhanced their lifestyles temporarily. That made it much more dangerous. I blame indexing for the mediocrity of actual returns made by investors this time around.
5. This time, the folks in Washington are wise to the game. In the 1960s, Washington saluted the higher stock market, but they didn't really understand that they should whip the stupid into a lather or how that could be accomplished.
Admittedly, I have increased my patience over the years. By the same token, I was earning $120 a month in 1967, so it is not like I could do anything close to my current thirds strategy. Also, I was about to be shipped to places where the market news simply was not available in any detail. So, it was now or never. I have tried to learn to be patient with folks who are in similar situations today. It is hard to talk longterm with a 19 year old kid. You sure couldn't do it with me back then.
But, basically, these markets all take the same pattern. They last much longer than we expect and they have huge numbers of true believers pounding the tom-tom for them. I still remember New Year's Eve in 1969: "If I had any money, I would invest in the stock market here." Tricky Dick Nixon. <G> That is about as close as the govt. got to trying to bull the markets in those days.
MB |
