Two Sectors to Watch for a Return to the Glory Days

We may have to wait a while to see bargain valuations in the stock market. However, the market should rise quickly when the next party gets underway because the Boomers are now in a classic position to chase the pot.

“Chasing the pot” is a gambling phenomenon which occurs when a player has lost a significant portion of money and needs to bet stronger if they want a chance at recouping losses. For example, if you lose 50% of your money, you must double the remaining half to return to even. In order to double your money, you surely can’t stuff your cash in mattress-like Treasuries yielding 2-4%. Instead, you are forced to take on large risks for the possibility of earning large rewards.

Unfortunately, most Boomers and older retirees have lost a bowel-movement inducing amount of their wealth. Visions of retirements spent at Cheesecake Factory (CAKE) and on Princess Cruises currently seem more like ideas from past lives. But have no fear, the always-get-what-they-want Boomers are here! In my opinion, this generational trait will be the key target of sales pitches from future Wall Street hucksters (and other salespersons).

Thus, once the dust settles and the Prom venue is ready for the next bull party, Boomers will feel as though they have no choice but to bet on stocks. Want to double your money this year and get back everything you lost in 2008-09? Alternative energy and health tech stocks are your time machine ticket back to the glory days.

Now that Boomers are dizzy at the table waiting to chase the pot, we can nearly guarantee that the next bull run will once again reach bubblicious proportions. Just think: Boomers shrugged off the dotcom collapse to pile into the housing and stock markets despite “cross my heart hope to die” promises to never chase another bubble or stay too long in a hot market. Regardless of these worthy intentions and pinky swears with spouses, greed always wins because “this time” is never different. The dealer is shuffling the deck. Stay tuned for when to ante up.

Comments

[winnersdon'...:]

Sounds like a "Texas Hold'm" game with equities, rather than chips.

Jun 12 10:35 AM

[vpratt51:]

I can't believe there are not numerous, humorous comments. Thank-you for the light, bright, and probably right side of forecasting. Rock and roll to rocking chair, eh? I'm 58 and may see only 10 more, but I swear they will be the best!

Jun 12 12:09 PM

[Javaharv:]

People you lived through the depression have since been very skeptical of equities. I think the boomers who are at retirement are very risk adverse. But those who think they have time may want to "chase the pot". Bubbles are like a ponzie they are impossible to resist, because "everyone is making money so why not cash in, until of course when the end comes.

Jun 12 07:08 PM

[Scott Weitz:]

Health Tech- even with socialized medicine on its way?

Alternative Energy- one can only hope...this is the only bright spot in the economy. Personally, I still don't see how it makes economic sense yet...unless oil continues to rise.

Jun 13 11:51 PM

[wall street...:]

Rock on!


On Jun 12 12:09 PM vpratt51 wrote:

> I can't believe there are not numerous, humorous comments. Thank-you
> for the light, bright, and probably right side of forecasting. Rock
> and roll to rocking chair, eh? I'm 58 and may see only 10 more,
> but I swear they will be the best!

Jun 20 12:31 AM

[wall street...:]

After the dotcom collapse, I heard many 40+ aged folks swear they'd never chase a bubble again. Only took a few years.

When a lifetime portfolio is down 20-40%, the choice remains: work for the rest of your life or try to make some back investing.

On Jun 12 07:08 PM Javaharv wrote:

> People you lived through the depression have since been very skeptical
> of equities. I think the boomers who are at retirement are very
> risk adverse. But those who think they have time may want to "chase
> the pot". Bubbles are like a ponzie they are impossible to resist,
> because "everyone is making money so why not cash in, until of course
> when the end comes.

Jun 20 12:34 AM

[wall street...:]

Economic sense and hype are separate. We are still in the first inning of the internet, but in 99 people were willing to pay for the next 50 years of profits. Same will occur when the sci-fi salesmen start pushing health tech or alt energy.


On Jun 13 11:51 PM Scott Weitz wrote:

> Health Tech- even with socialized medicine on its way?
>
> Alternative Energy- one can only hope...this is the only bright spot
> in the economy. Personally, I still don't see how it makes economic
> sense yet...unless oil continues to rise.

Jun 20 12:35 AM