j-dub

Why a Market Crash Doesn’t Matter

Can someone explain how in the world this comment would receive a thumbs down?
The commenter applauds the SA site as a whole, says she is concerned for her country's future and then respectfully questions the author's somewhat extreme assertion.
Anybody?

On a funny note, I guess if she implicitly called SA a waste of bandwidth, said, "To hell with the U.S. and good riddance," and blindly agreed with the author saying he actually didn't go far enough, one (very) unique SA user would have been quite pleased.

On Nov 22 01:27 PM annepiano wrote:

> A first comment by an Alpha newbie;
> I joined because of the quality and diversity of thought found on
> this site. I joined because I am concerned about the financial future
> of this nation, and globally. I seek to be more informed. This article
> however was very disappointing.
> " People who are worried about whether the stock market will crash
> or not are worried about a generality." "It shouldn't matter to the
> serious long-term fundamental investor."
> Chuck, how many of us are NOT serious or do NOT approach investing
> as a long-term discipline for future security and retirement ? Therefore
> how could one NOT consider a crash to be a matter of serious gravity
> ?

Why a Market Crash Doesn’t Matter

Allow me to take the other side of your arguement for a moment.
So indulge me, please.

First off, would you ever utter the title of this article to ANY of your clients over the age of 30?
Did Peter Lynch ever experience anything in his 20 year career on the level that we are currently experiencing ?
In the last twenty years, has the national deficit levels gone parabolic?
Do you believe the current administration feels would agree with the title or is it largely behind the stock market's recent upsurgence?

Gerald Celente has a line,"When someone loses everything, and they have nothing left to lose, they lose it."
On that basis, may I choose the title of a future article that I believe will prove to be widely read on SA?
"Why mass social unrest doesn't matter."
I am positive there are certain data points to support that title as well.

Large Caps Could Lead the Market Much Higher

He is.
However, I am not going after him because he is talking fundamentals-pe's.
That's great and that is exactly who bizarro world is going after=SOMEONE WHO THINKS IN REAL WORLD TERMS.
If bizarro world can recruit enough that initially believe the market run is a hoax, the bizarro world takes over real world and real world becomes bizarro world.
Anyone who thinks in realistic terms should thinks thrice before drinking the kool-aid and that is the opinion I am offering.


On Oct 18 04:36 PM TLassen wrote:

> j-dub
> Think the author is expressing a very responsible view. Money managers
> and investors need to learn to think in terms of probabilities. Learned
> a long time ago, the market does what the market does. Don't fight
> the market, but make your investments and trade decisions with 'what-if'
> scenarios in mind.
> Thanks for good article AB. In agreement with you that low rates
> mean higher PE levels.

Large Caps Could Lead the Market Much Higher

Appreciate the timely reply.
See, this is the effect that the gunning of the stock market is trying to produce. Money managers wondering if they are mising an economic expansion (perpetually, always a quarter or two away)about to occur (even if the math says it can not). Thus producing the snowball effect of moving the markets even higher .

I wish you luck and, yes, large caps with world-wide exposure certtainly might producce the highest returns in the next five years.


On Oct 18 08:22 AM Alan Brochstein wrote:

> As I said, I am not convinced that the possibility to which I allude
> is a probability, but I will say that after 31 years of following
> the economy and stocks, I have learned that having a handle on the
> economy (or thinking one does) doesn't make predicting the direction
> of stocks as easy as one might hope. It's always a question of "what's
> priced in".
>
> I became bearish on the economy in the summer of 2007, so I wasn't
> late to the game. I had an "aha" moment rather late last year (around
> Thanksgiving) that "this time is different". I still cling to that
> notion - that the economic recovery is doomed because "we went over
> a cliff".
>
> Here we are almost a year later, and things are much better than
> most of us, including me, might have imagined at the time. Of course,
> the intervention and support of the government has had a massive
> role and has tainted the recovery, but, nonetheless, even crappy
> companies are refinancing their debt. Heck, we even have IPOs and
> M&A again.
>
> Mr. Wendling, who started his bearish website in 2007 rather than
> 2009, could be correct generally (a big rally followed by a worse
> bear market move). I guess that is what I fear not expect. It is
> certainly not consensus, even among the bulls. As long as rates remain
> low, liquidity high and the animal spirits alive, there is a risk
> that the scenario I described plays out.
>
> It is not clear to me that this is sustainable, or I would act accordingly.
> So, this article is truly an exercise in "what if". Dave Wrixon,
> nice try, but I don't earn "commissions", so that's clearly not my
> motivation either. I hope that my additional comments reinforce the
> point I was trying to make - this is not my expectation yet but rather
> a scenario that could play out and for which I will look for signs
> (does IBM break to an all-time high, for instance).

Large Caps Could Lead the Market Much Higher

"I continue to think that the economy will be challenged for quite some time and that the earnings estimates out there are too optimistic. But what if I am wrong?"

In actuality, you are not really doubting yourself, are you Mr. Brochstein?
You don't think, you know that this is the case. Reality , logic and reason force that economic case upon us as a country.
So what you are really thinking in your heart of hearts is:
"Can the market can continue to disconnect itself from reality or will reality catch up to it?"
You assume that reality must take hold, as it always eventually does. But maybe, JUST MAYBE, you think, "this time is different."

I have bet very heavilly this past week that it's not. No responsible money manager should seek out new models proving that it is.