Peter Lynch

John Hussman: The Market Is Not in Uncharted Territory

Dr. Hussman, as usual, is right on. We need more fund managers like Dr. Hussman who is dedicated to his craft.

If this is truly the end of the world, your stock portfolio is the last thing you need to worry about.

This Isn't a Bottom, It's a Disturbance in The Force

Not sure if I understand what this article is all about. Is this some movie review for the Star Wars trilogy?

I accepted long ago that I don't know and will never know where the stock market bottom is. Instead of spending my time trying to buy stocks at the bottom, I find it much more productvie to figure out which great companies I can buy at attractive valuation.

And let's not forget that buying a stock is only half of the equation, the other half, and probably the harder half, is to figure out when to sell.

Learn from Japan and Have a Plan

Andy, you wrote:

"In 1989 the Japanese stock market, which hit a high of approx 39,000, started to implode. The financial strength of Japan started to unravel. The Japanese government thought it was prudent to lower interest rates to bail out the lenders. In retrospect it is very clear that this did not work."

There are many reasons why the Japanese economy has failed to recover from the 1989 bubble burst, but lowering rates too quickly is not one of them. The truth, in fact, is that the Japanese didn't lower their interest rate quick enough.

From wikipedia, en.wikipedia.org/wiki/...

"From the 1960s to the 1980s, overall real economic growth has been called a "miracle": a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s.[10] Growth slowed markedly in the 1990s, largely due to the Bank of Japan's failure to cut interest rates quickly enough to counter after-effects of over-investment during the late 1980s. Because the Bank of Japan failed to cut rates quickly enough, Japan entered a liquidity trap."

Greenspan has used Japan as a case study for his aggressive rate cuts in the aftermath of the 2000 internet bubble. In hindsight, he may had been too aggressive.

I have no idea where this market is going, and I gave up picking the bottom long ago. But like the tech bubble in 2000-2002, there are a lot of bargains out there. Investors just need to know where to find them and have the conviction and patience to hold.

good luck

Learn from Japan and Have a Plan

Andy, you wrote:

"In 1989 the Japanese stock market, which hit a high of approx 39,000, started to implode. The financial strength of Japan started to unravel. The Japanese government thought it was prudent to lower interest rates to bail out the lenders. In retrospect it is very clear that this did not work."

There are many reasons why the Japanese economy has failed to recover from the 1989 bubble burst, but lowering rates too quickly is not one of them. The truth, in fact, is that the Japanese didn't lower their interest rate quick enough.

From wikipedia, en.wikipedia.org/wiki/...

"From the 1960s to the 1980s, overall real economic growth has been called a "miracle": a 10% average in the 1960s, a 5% average in the 1970s and a 4% average in the 1980s.[10] Growth slowed markedly in the 1990s, largely due to the Bank of Japan's failure to cut interest rates quickly enough to counter after-effects of over-investment during the late 1980s. Because the Bank of Japan failed to cut rates quickly enough, Japan entered a liquidity trap."

Greenspan has used Japan as a case study for his aggressive rate cuts in the aftermath of the 2000 internet bubble. In hindsight, he may had been too aggressive.

I have no idea where this market is going, and I gave up picking the bottom long ago. But like the tech bubble in 2000-2002, there are a lot of bargains out there. Investors just need to know where to find them and have the conviction and patience to hold.

good luck