Gary Gordon

Reading into the Mass Exodus from U.S. Stock ETFs

Ron... you're one of the few that I read with any regularity. Best, G

That Wasn't a Bear Market, This Is a Bear Market!

Your thesis reads well in theory. However, the "average Joe" DID NOT merely "buy a smattering of mutual funds, individual stocks, sector ETFs." That's not a true accounting of historical events.

In the previous bear market, you had irrational greed for technology stocks and the so-called New Economy, resembling the irrational greed for real estate in the low interest rate environ that followed. People were heavily over-allocated to large-cap tech in the Nasdaq. Losses were 76% for the Nasdaq.

The market based wealth of most average Joe investors is/was based inside the 401k. The overwhelming majority of 401ks didn't even have small-cap funds inside them. That puts a further dent in the idea that you can use an equal-weight analysis.

Third, buy-n-hold investing was firmly entrenched in the minds of virtually all investors in 2000. The average Joe rode all of it down, mostly consisting of "get-rich-quick, tech fever" losses. This time, rational fear and irrational fear caused many more folks to sell earlier, rightly or wrongly, so many more people reduced the extent of their losses. Not so in the last bear.

As a radio personality, writer and money manager, I witnessed losses in the previous bear that far exceeded 50% in most cases. In fact, many were looking at 75% losses thanks to the tech heavy allocation of the "average Joe." In this bear, there were more efforts to mitgate thoses losses, since people weren't willing to suffer as badly as they had in the 2000-2002 period.

Obviously, from an emotional perspective, this bear is far, far worse. The last bear did not seem as bad due to home price appreciation. This bear feels worse because of a more severe recession and the epic real estate decline.

Nevertheless, if numbers are going to be used as though people were invested in a smattering, equal-weighted fashion, both then and now, that's inaccurate. It is also a bigger asssumption to asusme that everyone bought and held and hoped the way that they did in 2000-2002... many gave in earlier.

John Hussman: Is There a Possibility of $60 Oil?

Starkoski is troubled participant. He continues to speak about "Peak Oil" as if he's M. King Hubbert himself. Flow rate is not the only factor in the price of oil, even starkoski should know better. (Though he apparently does not.) Supply and demand is a factor, and nothing in supply and demand suggests oil doubling from $70 to $140 in a single year. Dollar destruction is a factor, and in the near term, it may indeed appreciate against world currencies. Speculation is a factor, and with 20 times more oil being traded than delivered, speculators have moved from dot-com to real estate to commodities. Psychology is a factor, and everyone has been pushing the long side. But if there's enough of an economic slowdown, a push to drill, a push for alternatives, oil can and will come down in price. John Hussman is not only credible, he's a fine money manager. Starkoski, get a grip.