sbenard

Back at the Bottom

Now that's interesting: the "fantasy book" indicator. Let's all buy right now!

I get such a kick out of all these guys that say that we should take a long term approach, buy now, and hold through thick and thin. I think we refer to that in the business as trying to catch the falling knife. That's a fine way to get bloodied badly! Just because prices have fallen far doesn't mean they won't fall a lat farther!

Besides, by tieing up funds now in a plunging stock market, investors incur the opportunity cost that those same funds might have been placed during the intervening period in something that might have MADE money. Instead, they lock away those funds for 3-5 years where they probably won't even break even, and will likely lose even more money.

Most of the people who advocate this long-term, buy-and-hold approach are just talking their book. They're hoping that if they can persuade enough people to start buying, it will drive prices higher and bail out their losses. Misery loves company, and they are miserable because they are in a badly losing position in a market that is only getting worse, and they now want the rest of us to join them!

No thanks! I'll stay short the market until real indicators tell me it's safe to go long. I'll keep making money by taking money from those who try to catch the proverbial falling knife and end up with their own financial blood on their hands.