Why is the voice today that of the knowned failed past?
or,
you can fool all of the investors some of the time
or some of the investors all of the time
or,
1929 circa 2001
lemetropolecafe.com
Safe Harbor - The following cut & paste i did of the article
at Gata Bill's cafe is only stuff in the public available at any
of your friendly libraries, so hopefully its ok to present it here.
But i would like to make clear that eventhought this stuff is of
a fluff in nature causing a laughter that hurts, there is a huge
amount of other stuff in this article of the unfluff type :o) dougak
The Kiki Table
Potpourri
Topic du Jour
How Fare Thee DJIA?
"This is the time to buy stocks.
This is the time to recall the words of the late J.P. Morgan,
that any man who is bearish on America will go broke.
Within a few days there is likely to be a bear panic
rather than a bull panic. Many of the low prices as a result
of this hysterical selling are not likely to be reached again
in many years." - R.W. McNeal, prominent Wall Street analyst
In our surreal new Age of Terror, every financial market participant
is eagerly monitoring the major US stock markets,
anxious with both warm feelings of hope and cold qualms
of dread. With recent geopolitical events radically altering
our collective perspectives on many aspects of life...
... may startle you to learn that Mr. McNeal's proud,
patriotic, and bullish quote we opened with above
is not from September 2001. Actually it is from the
New York Herald Tribune of October 30, 1929,
one day after THE great stock market crash!
Of course, every investor today instantly knows it was insanity
to be long US stocks in general following the October 1929 crash,
yet Wall Street did not miss a beat in being unapologetically bullish
all the way down to the dismal July 8, 1932 bottom in the Dow 30.
More popular sentiment from 1929 that proved to be disastrous advice
for investors "While the crash only took place six months ago,
I am convinced we have now passed through the worst,
and with continued unity of effort we shall rapidly recover.
There has been no significant bank or industrial failure.
That danger too is safely behind us." - Herbert Hoover,
President of the United States of America, May 1, 1930
Speaking of Wall Street, here is another 1929 quote
right after the crash from a prestigious and well-known publication
that is still unabashedly bullish to this very day
"The Wall Street crash doesn't mean that there will be
any general or serious business depression. For six years
American business has been diverting a substantial part
of its attention, its energies, and its resources on
the speculative game. Now that irrelevant, alien,
and hazardous adventure is over. Business has come home
again, back to its job, providentially unscathed, sound in wind
and limb, financially stronger than ever before."
- Business Week, November 2, 1929
The then fledgling Business Week had already arrived at
the conclusion mere weeks after the 1929 crash
that speculative excesses had been wrung out of the system.
Yet, on the day before this issue was published, the Dow 30
closed at 274. Investors who heeded Business Week's advice
would lose another 85% betting on the Dow 30 before
its ultimate bottom of 41 in July 1932!
The timeless lesson? Don't trust the mainstream financial press
during periods of rampant speculation and overvaluation!
"I see nothing in the present situation that is either menacing
or warrants pessimism. I have every confidence that there
will be a revival of activity in the spring and that during
this coming year the country will make steady progress."
- Andrew Mellon, United States Secretary of the Treasury,
December 31, 1929
"Stock prices have reached what looks like a permanently high plateau.
I do not feel there will be soon if ever a 50 or 60 point break
from present levels, such as they have predicted. I expect
to see the stock market a good deal higher within a few months."
- Dr. Irving Fisher, Professor of Economics at Yale University,
one of the most important US economists of his day,
October 17, 1929
... Investors who listened to the famous economist's advice
talking about a "permanently high plateau" (read "New Era"
in today's hip vernacular) would ride the burning market down
to a catastrophic 88% loss by the time the 1932 lows arrived.
For the legions of bold investors out there today who proudly proclaim,
"I invest for the long-term and have no fear",
it may be interesting to note that the Dow 30 did not return
to the lofty level of 342 until July 22, 1954. Talk about the long-term!
Investors who heeded Dr. Fisher's considered expert advice
in October 1929 got the chance to test the courage
of their convictions for 25 years before they saw
a single penny of capital gains!
The moral of the story?.....
The true financial patriots will.....
... better off we will all be as a nation and the sooner the real bottoms
will arrive so the true economic recovery process can begin.
"Hysteria has now disappeared from Wall Street."
- The Times of London, November 2, 1929
Adam Hamilton, CPA, MCSE
aka Zelotes
26 October 2001
zealllc.com
Mr. Hamilton, a private investor and contrarian analyst,
publishes Zeal Intelligence, an in-depth monthly strategic
and tactical analysis of markets, geopolitics, economics,
finance, and investing delivered from an explicitly pro-free market
and laissez faire perspective.
Copyright 2000 - 2001 Zeal Research |
