"How to predict a crash? The secret is programmed in your brain, your genes, your psychological personality profile. You’ll do what you always do. Look within. You’ll keep playing your own version of musical chairs, either naturally bullish or naturally bearish, timing your exit strategy to suit your risk tolerance, your judgments, your beliefs, biases, ideologies, not the data.
Yes, you will read new warnings, like “ Soros doubles a bearish bet on the S&P 500, to the tune of $1.3 billion.” You may double down too. Or do nothing. You may listen to Hulbert, Gross, Gundlach, Ellis, Shilling, Roubini and Schiff. And still do nothing. Or something. You will listen, take it all in, and do what you always do. Your way, based not so much on all the warnings, the facts, evidence, predictions. Rather you’ll make your own decisions based on some inner consensus of voices that always guides you from deep inside your brain.
But when the Mack truck suddenly shifts into high gear ... accelerating rapidly ... finally catching all of us by surprise... none of this will matter ... you’ll never hear it coming ... till too late ... few did in 1929, in spite of all the warnings ... you didn’t hear in 2000 ... nor in 2008 ... nobody will in 2014 ... the Mack truck will finally catch all by surprise, once again."
Market Watch via RCP
Any advice? Any predictions? Anyone planning on getting out, at least partially?
22 comments:
I used to play pretty heavily back around the end of the century. At first hauling it like magic so well that I was seriously planning on quitting my job at one point as I was making far more in the market. Then I lost it all, because after years of seeing every downturn quickly spin around into a new even higher rally with new profits, you just can't believe it won't do it one more time. Then it suddenly doesn't, and just keeps going down. I never did bail out until I got back to even years later. I've been out now for over four years, while the market has taken huge gains again, but I don't miss it at all. The constant watching of those numbers was a huge distraction to my life. I now only invest in what I can control personally, my own businesses, and people I know personally. I limit my gambling to a few lottery tickets a year, and a few hours of video poker over a beer and conversation once in a while. I can still go entirely bankrupt in under year if things don't go well, but it's just not as scary as that far away impenetrable game of wall street. It takes over your consciousness all day long. Ain't nobody got time fo dat.
Another market crash at this point would be too much to bear. The orderly transition to more sustainable investment isn't in place yet, politically. Confusion rules, for the moment.
The current gains are almost entirely due to money printing, and productivity gains from digital technology leading to less need for people, both of which are real things that will leave you wealthier if you ride those waves relative to not riding them, but the quantitative easing is stopping, so the growth will too. The productivity gains are going to peter out also, as we have taken the low hanging fruit already.
The remaining growth input is the abundance of energy we now have discovered as both renewable and fossil fuels are hitting an unprecedented stride at the same time and competing to lower costs. Fossil fuels are kicking their butt, but the result is just more of an important resource, and that's good.
On the negative side - busybodies and corruptocrats with power worldwide, but I think they are currently in the process of being made fools by the facts they want to ignore, and the lies they rode to power on in the past.
Invest in precious metals - brass and lead.
Burned badly more than 10 years ago. My own stupidity. No one to blame. All that said playing the market successfully requires so many contradictory traits in an individual that very very few can pull it off. For example: great patience combined with the ability to pull the trigger at a moment's notice. Also the ability to be absolutely objective about your own positions: not to fall in love with and get attached to a stock; not to stay with a loser hoping it will recover, take the loss quickly: VERY HARD to do.
The one piece of investment advice I can offer with a high level of confidence is -- don't take investment advice from Paul B. Farrell.
I agree with ricpic, taking a loss is the toughest part of successful investing.
My investments are very conservative. While I'm not bringing in that much money from them, it's a constant cash flow my way.
I wish there was something besides the market. Sure, commodities, metals, but they alll seem pretty much a crap shoot unless one devotes ones life to learning that trade. Bonds, same. So, I just stick with what I have, 401K stuff. When it all goes to shit then so will I. But, one good thing is that I already have my cardboard box picked out, it will be warm in the desert but at least will keep the snakes out.
I have all my money invested in bras and panties.
lol Sixty.
Thanks for all the interesting thoughts, guys. I don't know from finance, myself.
Troop, buy short, sell lingerie.
HEY, I wrote my 3:06 before I saw Troop was going to a lingerie show.
Chick, it's culottes or bust.
Did you hear what Galateo said his tailor?
Va' fa' un culotte, per favore!
IIRC he also said, 'let them eat culotte.'
I'm out of the stock market. Too much risk of a major price correction after months and years of Fed pumping causing the prices to be artificially propped up.
If I went back in, the only things I'd buy would be energy and energy-related companies, and Berkshire Hathaway.
Thank goodness Lehman Brothers wiped me out in 2008 and I have nothing left to worry about.
If you are young, you can afford to stay in, and the market will eventually come back.
But for me, I expect another very strong "correction," and the market not to come back in my lifetime.
Hagar said...
If you are young, you can afford to stay in, and the market will eventually come back.
But for me, I expect another very strong "correction," and the market not to come back in my lifetime.
The conventional advice is to move into bonds 10 years before retirement. My father left his money in stocks and did very well. Lot of luck in life.
There's a graphic that shows the markets on the same track as '29.
How accurate it may be, I don't know, but all the QE reminds me of Weimar and we all know how that turned out.
Best advise I ever got? "Never meet a margin call." Fortunately I bought a ton when silver was $4/oz and gold @ $273/0z back in the 80s plus loaded up on bags of silver dimes for barter, so I'm pretty much set for whatever. Buying bullets and beans now...btw, bullets are good for barter too..
""Never meet a margin call.""
Please explain.
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