Tuesday, November 08, 2011
Great game last night, for those of us who cheer for the Bears (your blogger lived eight years in Chicago, back in the day) or against the Iggles. I do both, so it was a nice evening.
Less frivolously, here is a graphical look at the four major "secular" bear stock markets since 1900. If history repeats itself, we will not really break out until 2016-18, which will be 15-17 years after the crash of the tech and telecom bubbles in early 2001.
My grandfather used to talk about bear markets. He was born in 1900, and was fortunate to have graduated in the Harvard Business School's second class. He invested through two secular bears -- the Dow was net flat from 1929 to 1954, and again from 1966 to 1982 -- and yet still managed to make plenty of money by methodically saving and investing in good companies over more than 60 years. Time and faith in America got it done, and they will for Americans who are just starting out today. Recessions and depressions are painful, and they can stall personal and national progress for many years -- the same grandfather said that the Depression set him back ten years -- but they always end and will again this time.
Not too long ago we organized a learning session for my children and their cousins on how to budget, how to save and and how to invest effectively. The broker who conducted the part of the day devoted to effective investing stated the key lesson, one you've no doubt heard many times but a lesson still worth repeating.
The stock market over the long haul is by far the best place to keep your savings, if you are young, but every investor goes for very long periods where they earn nothing at all. The returns come in very short but dramatic bursts upward, and the only way to make sure you earn the capital growth is to stay in the market through thick and thin.
Maybe; but I think this is different than before in a positive way. For one, there has been Reaganomics an actual basis for equating low taxes across the board including the wealthy with prosperity for all via employment, etc. So, my view is that possibly this is a sped up version of the 70-00s such that might Obama lose and the Senate complete the Republican control of all 4 federal branches (sort of The Court, too), then we'll lead more quickly than that into an 86-00 boom. Maybe not, though. But if the P/E ratios and growth expections however uninspiring hold, many of the stocks are once in a generation buys (and more certainly were on October 3rd). Forget pre-Depression numbers and look at the modern era, even buying at the beginning of the stagnant periods was a good buy, especially in 1965-(say)1985. I think the boom begins maybe now; or else mid-2013 to end-2014.
The "Bears". The "Bears". I know that name rings a bell. Oh, right, weren't they the team the Niners used to use for batting practice back in their heyday? You know, back when they won five Super Bowl rings? Let's face it, Tige. Once Joe Montana and Walter Payton left the league, it simply hasn't been the same since.
Now, down to business. As you know, when I soundly excoriate, ridicule, mock, scorn and degrade a fellow blogger, I immediately feel the urge to laugh in his-, I mean, I feel a moral obligation to inform said blogger that possibly vile, despicable things have been said about him. Such is the case
You've been warned.