Yeah; It's Different This Time

Townhall.com ^ | March 23, 2013 | Bill Tatro

[Kaslin]

Here they come, right on time.

I’m referring to all the pundits who proclaim the power of the stock market. It goes something like this: If you had been wise enough to avoid the 2008 stock market crash, then obviously you would have been knowledgeable enough to hear the bell ring, which gave the “all clear” signal on March 6, 2009.

In other words, you would have known that 3/6/09 was indeed a major bottom of the market, thus you would have fully deployed your money into stocks and ridden the Dow Jones gravy train upwards to the extent of approximately 8,000 points, receiving a very handsome gain of about 118%.

And since your timing was proven to be so ideal, I’m certain that you also avoided the 2000 dot-com debacle.

Hence, when all others were declaring the dot-com era as the new paradigm and 23-year-old CEOs with innovative internet ideas — backed by millions of dollars from Wall Street — were acting like the next Carnegie, Rockefeller, or Du Pont, you most certainly said, “Phooey, I’m not being suckered.”

With that said, you definitely knew that the five-year period of 2003 to 2007 would produce over 50% on your money.

Yes, it’s clear as a bell to all the money managers, financial talk show hosts, and financial columnists, that when you make your decisions in hindsight you’re usually 100% correct.

These so-called experts will throw stones at those who look at the world and see difficult times, and just say it’s only a “wall of worry — stay invested.”

They’ll also chide those investors who did enter the stock market in January of 2000 on their advice, only to be burned.

Unfortunately, the very same investors said, “I’ll listen to you again,” and entered the stock market in 2008, only to be badly burned for a second time.

Those that were seared will forget the past and simply say, “It’s different this time.”

But had investors rolled the dice at the stock market top in 2000 and stayed the course, they would have realized a whopping 13.25 year return of 4.95% year-to-date — that’s 0.37% per year, obviously well worth the angst and aggravation.

Incidentally, that’s not quite as good as Ben Bernanke’s current zero interest-rate policy (ZIRP), but it’s pretty darn close.

Ahhh, stocks for the long run — gotta love ‘em — especially when the pundits are blowing their horn and you need to earn 4% on your investments per year in order to make ends meet.

[logic101.net]

Thanks for the topic, although I’m not sure exactly where you stand on the market right now.

I’d been closely following the market for a while, watching in particular for my company’s stock to get to my sell price. This happened at the end of Feb. I was still following the market after that and on 3/7 the words of Warren Buffet came into my head. “When people are fearful be greedy, when people are greedy be fearful.”

Their are some issues that do partly justify the price of the market (QE, low interest rates, etc), but not to this level.

I have since re-balanced my 401k to be mostly in T bills. I think we have a stock bubble and am waiting for the crash.

I’m not an expert, but you may want to consider selling.

[lentulusgracchus]

I have since re-balanced my 401k to be mostly in T bills. I think we have a stock bubble and am waiting for the crash.

Me, too. Ever since April 2009, when the market seers convinced me that we were seeing a "W-shaped" market bottom, with another leg lower in the offing.

Too bad they forgot to tell Barnacle Ben Bernanke. He and Timmy Geithner and "Hank the Shank" Paulsen have been driving the market like a stolen car since about, oh, 2003 at least (including Gargoyle Greenspan's last Greenspan Put).

They still have to help Hank's old employer, Goldman Sack and Rape, make back the trillions and trillions they lost when the credit default swap market cratered with Lehman Brothers.

[4Liberty]

[4Liberty]

I got out of stocks & bonds last year. Given 1) the levels of (insolvent) sovereign debt, & 2) what happened to GM bondholders. Cash and precious metals, for the time being.