The Bulls, The Bears, & the Media
Today's "What's Online" column in the New York Times is about an ongoing debate between Paul Kedrosky, Herb Greenberg and I, titled Taking the Bears to Task.
That was kind of a WTF headline. Taking the Bears to Task? For what -- being right? Coming up next week: People carrying Umbrellas in the rain -- Whats wrong with them?!
A few corrections are in order:
The article links to the wrong blog post, pointing to our emergency Fed cut discussion (Whiff of Panic), rather than the post quoted, So Much for the Decoupling . . .
What's worse, the author apparently misunderstand our criticism. Had he contacted me (!), I would have told him that its not that some strategists got it wrong, or that "people remained positive about the markets and the economy." Understand this: Markets are all about differences of opinion, and there are always credible arguments on both sides.
Merely being wrong is no sin . . . It's the process, not the outcome, that matters. (See our 2005 column, Expect to Be Wrong)
No, our criticism was about the Its-Different-This-Time crowd. The post's (obvious) main point was a list of well established economic and investment rules that some people decided to (once again) ignore. Was the year 2,000 so far in the past that these lessons have been already forgotten? These Its-Different-This-Time clowns are the ones that cost investors their money -- the sanguine cheerleaders, the pollyannas, the political hacks.
But back to our debate: The Times references Paul's post, "Why are Financial Blogs so Bearish?" That post reminds me of this The Daily Show exchange:
Rob Corddry: How does one report the facts in an unbiased way when the facts themselves are biased?
Jon Stewart: I'm sorry, Rob, did you say the facts are biased?
Rob Corddry: That's right Jon. From the names of our fallen soldiers to the gradual withdrawal of our allies to the growing insurgency, it's become all too clear that facts in Iraq have an anti-Bush agenda.
That was about Iraq the war -- but its not too hard too see that the economic facts maintained a similar "bias."
~~~
Name calling: I've always chafed at the Bear label. It's a an intellectually lazy, ad hominem criticism -- much easier than addressing the actual arguments about economic concerns. It also ignores our longstanding advice that investors maintain "ideological flexibility." (See: Bull or Bear? Neither)
Some of those disinclined to mental exertion (no, I am not referring to Paul) like to point to the Bearishness of the past few years -- but somehow, they never, ever, mention the Bullishness. We take this as proof their argument's disenginuousness.
Perfect example: In 2002/03, we wrote a detailed explanation as to why the markets had gotten too bearish, titled Contrary Indicators 2000 – 2003 Bear Market. That originally ran in the Stock Trader's Almanac as a 3 part piece in June, July and August of 2003, and eventually was posted on the blog. The irony is that much of the critical email accused me of being a perma-bull -- despite turning aggressively bearish in January 2,000.
Investing: As money managers, no one pays you to sit in cash. We flip bullish and bearish as conditions, risks and opportunities warrant. For example, this past Wednesday, on CNBC, we flipped Bullish, calling for an 8-12% rally. But we also noted this was a trading rally. The 2008/09 recession bottom likely has not been made yet. The usual name callers would never credit us for a good bullish trading call, but again, that is merely more evidence of their hackery.
Some people have criticized our defensive posture, but it has well served our clients for the past few years -- they made money in overseas investing, in energy, metals, gold, agriculture, etc. For "Bears," we've done pretty well on the long side. Our "favorite stock pick for 2007" in BusinessWeek December 2006 was Mosaic, which was up 330%. And, our forecast was the best out of all of the WSJ/BusinessWeek predictions for 2007. (For the record, we think predictions are silly, and we do them just for fun).
~~~
Of course, one's perspective is a function of what you do during the day.
Paul Kedrosky, for example, is a venture capitalist. We've worked on several projects together, and both scribe for TSCM.
Paul's job is to purposefully put money at risk. He is looking at early venture companies, start ups, new ideas. That requires not only technological and finance skills, but a specific kind of optimism. He knows despite the long odds -- most start ups fail -- that the next Apple or Google is out there.
Herb Greenberg is an investigative reporter. His job is to identify the seemy underside of business, the frauds, the crooks, the liars -- even the occasional errant Sith Lord.
I have a different perspective. I manage money for a living. That creates very different obligations -- its to preserve capital and manage risk. Since inflation is always eroding our clients assets, we must find ways to offset that by generating returns in excess of inflation. Part of our calculus is when to go into risk-free treasuries.
And because of our long experience on Wall Street, we have become rather skeptical of what we read in the papers and hear on TV. We have not forgotten all of the television cheerleading in 2000, nor the analysts who lost investors trillions. We well remember the investment banking scams, the corporate accounting fraud, the lax regulatory oversight, the general theivery that took trillions our of the pockets of individual investors.
As Raymond Jame's insightful strategist Jeff Saut likes to say, where you stand is determined by where you sit. And where I sit requires a healthy dose of not letting the bullshit artists lose our client's money.
I suggest readers and investors do the same . . .
Saturday, January 26, 2008 | 08:04 AM | Permalink
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Unbiased observation is essential, but it's also nearly impossible (especially when what you are observing is deservedly questionable in its authenticity).
Question everything. Believe half of what you see and none of what you hear. Doubt is essential to good decision-making. Always err on the side of caution.
Posted by: Marcus Aurelius | Jan 26, 2008 8:58:39 AM
I suggest "Its-Different-This-Time" works both ways. Yes, the global economy can never completely decouple from its largest consumer. But yes also, aggressive monetary and fiscal policy will re-stimulate economic growth - including housing.
If we do stave of a severe recession, and with an additional 50 bp cut next week, I believe we now have a chance, we might all want to thank Jerome Kerviel in a perverse way for making it so.
Why we have a chance:
While many homeowners are in a world of hurt, many others are waiting in the wings. With 30 year mortgage rates at historic lows (5.00 - 5.50 30yr), refinancings and home purchases will pick up dramatically.
A house is more than an investment. Prospective homeowners will be willing to risk some further depreciation in home prices as a trade off for today's extremely low mortgage rates. There will not be a recovery in the over speculative regions (California, Nevada, Florida), but housing in other regions will do quite fine and will help to mitigate these losses at the national level.
Refinancings will not generate nearly as much new cash to pull out, but they will generate some and contribute to discretionary income. Refinancings will also lower monthly debt service payments and increase homeowner cash flow.
Lower libor and treasury rates will benefit ARM resets by 200 bps. More homeowners who would have "walked away" will now be able to muddle through.
The fiscal package will be coming in at just the right time to provide discretionary income as home equity balances are depleting.
My conclusion is that aggressive monetary and fiscal actions can stave off the upcoming headwinds (one of which will be the loss of up to 1 million construction jobs in 2008 as commercial, condo and new home construction drop dramatically), and will buy time for the necessary structural changes to take place (less consumption, more exports, fewer imports).
We have been building these excesses for 20 years and we simply cannot correct them overnight without triggering massive job losses, deflation and the permanent destruction (beyond creative destruction) of valuable economic institutions.
Even with aggressive monetary and fiscal stimulus, this economic restructuring will be painful to the consumer. But it is absurd to think that the best course of action is to let the market rapidly adjust for the imbalances that have taken 20 years to build.
As flexible as our real economy is, it simply could not adjust quickly enough to absorb the economic destruction of institutions, the loss of wealth and the massive dislocation and retraining of workers that would accompany such an approach. We tried this once already and concluded that Hooverian Economics do not work.
Posted by: bsneath | Jan 26, 2008 9:04:52 AM
bsneath, is there really a lot of buyers of homes, waiting in the wings? I frankly doubt it, but that doesn't mean that it isn't true.
Posted by: Justin | Jan 26, 2008 9:23:04 AM
Being realistic about the market is truly difficult because no one has come up with an adequate discriptive word for it. Because that outlook switches from positive to negative from time to time, some around me think I am a trader, or a market timer, but I am not. Some think I am a pure technician because I do use point and figure, but I am not.
Our most negative person in the office commented to me Friday that I was even more negative than he. I am not. He is always negative. I have high conviction in both negative and positive directions.
Tuesday we were pleading with clients to wait for the overdue oversold rally to reposition some assets. Thursday, as the internals of the rally were less than stellar, we were encouraging the repositioning. Flip flop? No. Absolutely not.
The problem in this business (asset managing, retail advisors) is that it is so easy (in this business) to make a living with limited knowledge or effort at great expense to those who failed to look past the veneer. The vast majority of those helping retail clients spend very little time being a student of the markets, economy. They, by and large, read the company line (why re-invent the wheel, right?), and regurgitate it. If things fall out the the parameter discussed by those talking points, they start avoidance tactics.
According to some, I "waste" an inordinate amount of time reading a wide variety of information from a diverse group of authors. But I have an opinion, a short term outlook, a long term outlook, and I can back it all up in depth because it is mine and I have conviction about it. Is it right? Heck, no one truly knows that until it has long blown over.
The reality is that most of the major strategists are hedging by "looking for a stronger second half". Just like they were hedging when they said housing effects were "contained", Just like they were hedging when they said "the economy will slow, but we should avoid recession". It gives them an out as "facts come to light". It keeps client's of their firm from panicking or moving too much to cash which isn't fee'd in most cases. It leads people down the path of "well it's too late to do anything now".
How many people do you know that are banking on a recovers or "better" second half of '08? Which stat will be right, the presidential election year stats, or the first 5 days of January, or the breaking of December lows, or the lack of a Santa Claus rally, or the AFC winning again, or "don't fight the Fed"?
Please. Bulls, Bears all get slaughtered at some point. Realists make it...
Posted by: JasRas | Jan 26, 2008 9:42:49 AM
Posted by: bsneath | Jan 26, 2008 9:04:52 AM
In keeping with my earlier post, I doubt "Fiscal Stimulus" will work. The bottom is a long way down, and there will be many casualties along the way - regardless of how quickly or slowly we descend. Any attempt at "Fiscal Stimulus", by our feckless government will be ill-conceived, poorly executed, and rife with holes and loopholes that will be exploited and abused to the point that the original intent of said measures will look like lunacy in hindsight.
Decline is usually efficient when left alone. Trying to break our fall will do more harm than good.
Posted by: Marcus Aurelius | Jan 26, 2008 9:45:32 AM
There probably are a lot of buyers waiting and willing to buy at lower mortgage rates, but if they must sell their existing home first, the process may take longer than we would like to see. Those with the cash (not so many of these) are golden.
Posted by: Lars | Jan 26, 2008 9:48:09 AM
Only money managers are the pilots.
Everyone else gets to spout off and flip flop. They will not be held accountable. Money managers are required to be the parents in a room of teenagers. It is up to us to protect our clients and their capital. It will be considered our fault if we do not. Clients will often fire you for losing money. Sometime they will also fire you if you appear to be "missing out" on some gains. We must accept that in order for us to do our job well we must "miss out" and "look wrong" at certain points in each market cycle. That is what having a discipline means.
When you have a discipline that works you have to stick to it and do the right thing no matter what your clients may think from time to time. If this means holding cash, so be it.
Without a discipline that we stick we are literally useless as money managers. The world is already full of the useless spread it around and hope for the best crowd.
Recently people have been asking me why there seem to be so few “financial experts” who ever talk about trying to avoid down markets? Why do most insist losses are unavoidable and holding and hoping is all one can do?
The best explanation that I can come up with is the fact that the vast majority of financial advisors out there are not actually portfolio managers with a skilled and proven management discipline. This is another way of saying they have no buy or sell rules to manage risk. Most are financial planners, or financial journalists or investment sales people. They have no skill or training as actual money managers, so they know no alternative but to tell people to hold through market downturns. Sadly, the blind lead the blind right over the cliff each market cycle. Personally I find it very sad to watch.
People that have not invested the time and commitment to develop a definable risk management discipline around investing, really have no business giving people investment timing advice. Telling people to never sell equities and insisting that no one can time markets is giving investment timing advice--advice that most are just not qualified to give. (Spreading money around in equities does not count as a valuable investment management technique as world stock markets have shown once again in recent weeks).
Those with a financial planning and sales background should stick to general financial planning advice and leave investment management to those few who have devoted our life work to doing it well. I know of no other profession where the unqualified are given such freedom to run amuck. http://www.jugglingdynamite.com
Posted by: Danielle Park | Jan 26, 2008 9:51:28 AM
shaping the landscape on MSNBC right now
Obama race in SC ie: its not the economy or the war, its race and gender
shaping an establishment win in November
lucky for cable I've got a trucker housemate - cause digital tv is bringing back the antenna
Posted by: Greg0658 | Jan 26, 2008 9:56:37 AM
A bit off topic, but yesterday I tried calling around to a few of the bigger banks (BoA, Wells, Citi) to get some info on refinancing and I couldn't even get through. At most of them, I waited on hold for so long I finally hung up. At Wells, there was an actual message that said the call volume was so high, that I should call back later.
I am not saying that we are entering a new housing boom or even close, but I think people are underestimating (for better or worse) the impact of the lower rates. 30 yr fixed are now in the low 5's, which haven't been seen in years.
Posted by: bob | Jan 26, 2008 10:00:33 AM
"said measures will look like lunacy in hindsight"
to me, they look like lunacy NOW. Tax rebates to get consumers to spend when banks around the world are losing billions, real estate prices are falling, and the layoffs are beginning??? This is really nuts and not going to work. IMHO.
The chickens are coming home and it ain't gonna be pretty. Of course, if I am good and scared, the market just may rally hard for another week or so but Monday should reveal a lot and no one has to decide what to do right now. thanks BArry. and that long airplane story really freaked me out. Please don't do that again Eclectic.
Posted by: lurker | Jan 26, 2008 10:06:22 AM
Barry,
First, good morning... I see you are up and at it early this Saturday morning. :-)
I have four comments:
1. Your right, Dan Mitchell tosses you into the perma-bear crowd, and then he links to one post - out of hundreds (thousands?) - to prove his point. And, it wasn't even the correct post. Hmm... the press getting it wrong. No surprise here; the older I get, the more critical I become regarding everything I read, see, or hear.
2. Wouldn't it have been much better if Mr. Mitchell had linked to a source which would provide a wider gauge of investor blogger sentiment? Such as: http://tickersense.typepad.com/ticker_sense/
Not that the above poll is perfectly scientific, by any stretch of the imagination, but at least it is better thank linking to one blog post. Of course, linking to such a poll would NOT support the claim that a majority of financial bloggers are bulls or bears; in fact, the most recent Tickersense poll indicates an almost even split between the two camps.
3. Are you a perma-bear or perma-bull? I wouldn't put you in either category. Pragmatist? Yes. Realist? Yes. Beyond that, I must be missing something Mr. Mitchell is seeing.
4. Wouldn't it be nice to have a "leave a comment" feature on the NY Times web site? You can e-mail, print, or request a re-print, but you can't comment. Interesting that this functionality is not present.
Everyone, have a good day.
Posted by: Cameron Dean | Jan 26, 2008 10:12:40 AM
Hmmmm? “rouge banker/trader” my ass. . . think about it - - how convenient it is whenever a bank is robbed, if the insurance settlement winds up paying more than he bandits actually stole because how much is missing can often become a case of he said/she said, thus giving the bankers “a little cushion,” for some of the prior bad deals they made. What if Jerome was merely making trades that his boss had approved, but alas, things went awry, so to speak? Given the alternative – Societe General SA looks incredibly incompetent to the point of criminal negligence or let the kid take the fall to save everyone else’s’ venerable old asses . . . Wherever you are -- Be careful, Jerome Kerviel, be very careful.
Posted by: Jim | Jan 26, 2008 10:19:29 AM
JasRas: Just now reading the comments, and see the last line of your comment... agree with everything you say in your post... in regards to the last line of your post, glad to see I am not the only one that see's Barry (and this blog) as realist.
Take care.
Posted by: Cameron Dean | Jan 26, 2008 10:20:24 AM
Marcus - good points
I emailed on the spot (tho maybe never seen) and certainly not asked as of yet
ask Paulson at the announcement "is paying down credit cards a good idea?"
Chairman Ben said at his last hearing - it would be best to buy American - I would add buy Local with the money
for me and my maybe 300 dollars maybe I can compound that with my small business loophole if there is one
Posted by: Greg0658 | Jan 26, 2008 10:23:25 AM
Bob,
Yes....it's back on! The new real estate boom has already begun.
I'm in the business (closing attorney) and just had my busiest day (Friday) in months, w/ people refinancing. Watch out next week if Uncle Ben delivers again.
While it is good for me personally, I despair that it appears nothing was learnt. You can't borrow your way to prosperity. Houses don't appreciate $20,000 (about 10% in this case) in four months, as an appraisal claimed in one of the refi's I did yesterday.
Cheap money is an addiction that distorts the addict's view. Asset inflation creates the illusion of wealth, but nothing more.
But like the movie Groundhog Day, it appears we have re-awakened and its 2003 all over again, and again, and again.
Oh well. A couple more years of mortgage market insanity, and I'll be set to retire--as long as I can turn all the slips of US paper into something real before the paper's best use becomes kindling--off the grid and on enough land to grow my own. Then hopefully when the real decline comes that can no longer be forestalled because there are no more illusionist tricks left to the Wizards of Oz, it won't matter to me.
Posted by: Don | Jan 26, 2008 10:28:27 AM
Bottom Line: The average Joe six pack is a baby boomer quickly running out of time. His single largest asset, his primary residence, is deflating rapidly. This single largest asset is also the primary collateral for his single largest liability. His balance sheet is rapidly deflating as all his assets, from his home to his equity portfolio, all simultaneously deflate while his debt outstanding may actually still be increasing. His debt servicing costs not dropping, despite aggressive rate cuts, and may actually be rising. It has also become damn near impossible to refinance certain mortgages as easy credit evaporates. On top of that, Joe six pack should now be seriously concerned about his job security. So when a cheque for $300 to $1500 arrives in the mail, Joe six pack is not going to spend it on a $200 steak dinner or a new computer or on a vacation. Got it?
More on the stimulous package: (http://benbittrolff.blogspot.com/2008/01/fact-sheet-bush-stimulous-package.html)
Posted by: BenBittrolff | Jan 26, 2008 10:30:02 AM
On the magazine cover front, we see today, "Americans expect a recession but also survival -- Most aren't worried about their own situations yet, a Times/Bloomberg poll has found."
So on which is this indicator wrong? Recession? Or survival?
Posted by: jm | Jan 26, 2008 10:30:57 AM
Because debt is the instrument of expansion under our economic system, the only variable that can be affected is time.
All are aware that the housing boom was spurred by aggressive rate cutting - but what is the result of ultra low rates on time?
It changes time preference to an attitude of immediacy of spending. The real question is how does that forced percpetion change affect future economic activity?
The net affect is a compression of economic time. Housing explains this well.
Twenty or thiry years of normal economic housing activity was compressed into a few short years. But once the artificial expansion culminates, a void is left that must either be filled with a new type of buyer or the expansion cannot sustain. In the case of housing, future demand was borrowed to show as an asset on today's balance sheet - but having stripped future demand, what is left?
All that was accomplished was illusionary, as future productivity was brought forward to show on today's balance sheet. And now having borrowed from that future, there is little left to fill the void.
It is not unlike the shennanigans you often see in corporate accounting, shipping goods out the door to distributors who are not selling the product in order to keep the balance sheet intact - counting the shipped goods as revenue this quarter while in effect only boosting accounts receivables - and counting future sales as current revenues.
It can work for a quarter or two, but then the shennanigan unwinds when stripped of illusion by the reality of slowing sales and a growing days-to-receivable ratio.
The problem of compression of economic time through the utilization of ultra low interest rates is that it caps expansion when the market saturates - at that point, having borrowed the great percentage of qualified buyers from the future, there is no one left to fill the void.
This is the point reached in housing in late 2005 and into 2006. Having borrowed from the future to count as expansion today, the only way left to continue to create an illusion of expansion was to marginalize uncreditworthy borrowers.
The mania was so great duting this period that it was not enough simply to borrow future economic activity but future foreclosures and bankruptcies were borrowed, as well, and these future claims of insolvency were tossed as logs onto the pyre to fan the flame of false expansion.
We are now paying the price for having borrowed against future economic activity.
However, none of this should come as a surprise, for over the last 30 years or so this is the accounting standards we, as a nation, have adopted - borrowing from the future to credit as a benefit today.
But all it is, really, is a shennanigan. There is no "quality" to these earnings. They are unsustainable.
Posted by: Winston Munn | Jan 26, 2008 10:32:28 AM
I always understood Bull and Bear to describe MARKETS and not Traders. There are distinct definitions, right. SMART traders have the knowledge and experience to negotiate ANY market.
I think it laughable that networks like CNBC try to TAG traders as Bulls and Bears? "Aw, the bears have taken over the market today" WTF does that mean? No, the underpinnings of the market or that drive the market up, are not present.
Cramer is always portrayed as a stud. What a BULL that Cramer is! No, more like a risk taking trader who relies on conjecture instead of facts.
Man, your life is like a beer commercial if your a Bull. Ya, Baby, hot chicks(dudes) and fun.
I think this market is pretty obvious and I'm sorry that some of you traders/financial planners are headed for hard times. But many looked the other way while stuffing their pockets including many running this country. Some claim that the self-centered nature of the human will lead to the demise of Democracy. We just can't help helping ourselves. Even when we do things for others it's because it makes US feel better.
This we'll be okay, we'll not be okay debate will go on for months until this unwinding runs it's course. You can't make day come faster in the middle of the night by talking about it.
The variables in play are enormous and I will wait until clear signs of a BULL MARKET are present to make my plays as I am a amateur. I still can't help being pissed about the fact that in the end my children and I will paying for this in the end.
I also worry about the variable we are missing. What could we miss in this fiasco that could make this much worse?
Posted by: ken h | Jan 26, 2008 10:36:24 AM
The media for the average Joe is 100% bullish 100% of the time. What I mean by that is if you turn on any nightly news show, local, network or cable, if the Dow is up 200 they will always say "great day for Wall Street" or words to that effect. I will run naked down 5th Avenue if anybody ever heard it said "great day for Wall Street" if the Dow was down 200. That brings me to CNBC...clearly they cheerlead the market and would greatly prefer up markets for many reasons...ratings, advertisers, GE's stock price, etc. They will ask guests to put bullish slants at times and will break out in laughter if market is up 300. As a bear, it is sometimes sickening, but they do have guests from time to time that will be non-bullish and they make it bearable to watch at all.
Society in general like optimists...you cannot advance in any corporate setting being pessimistic. People don't want to hear me say bearish things about housing, the economy or markets...it scares them because their future is at risk. They will shoot the messenger, so be careful what you say bears...and be ready and willing to turn bullish again sometime in the future.
Posted by: Steve Barry | Jan 26, 2008 10:45:20 AM
Eclectic...well-written story--you should be making a living at writing, if you aren't already.
If I were the pilot, I'd say WTF, I'm not aborting. As long as the engines don't quit, you've got a better than 50% chance to fly through almost any type of weather, but trying to stop a lumbering whale of a jumbo jet at almost take-off speed on a wet runway would be insane. Besides, if your gamble on takeoff fails, likely neither you nor anyone else on board is alive to complain. But the wet runway leaves lots of dead, a few that escape unharmed, and lots of injured--in short, a much bigger mess from which your life, if intact, would likely never recover.
So, I guess the metaphor is to money managers. I see why they rarely stray from their chosen path.
Posted by: Don | Jan 26, 2008 10:54:20 AM
Don - great insight from someone in the business. I agree, long term this is not going to help the underlying issue in that this country has way too much debt. Short term though, I think people are really underestimating this impact.
BenBittrolff - you just posted this same garbage over at Random Rogers blog. STOP SPAMMING. Barry - please block this idiot
Posted by: bob | Jan 26, 2008 11:04:18 AM
and you cables and fiber networks - looking for help on HDTV piping in the NetNeutrality debate - additionally getting rid of folks like me
we will push for www access thru wifi networks we can access at public librarys, truck stops and coffee shops
Posted by: Greg0658 | Jan 26, 2008 11:05:06 AM
I can't believe they would quote bloggers for a newspaper without discussing it with them. What irresponsible journalism. ;^)
Posted by: donna | Jan 26, 2008 11:26:09 AM
Barry-Isn't there an issue of perspective in all this? If I inherit $ 200,000 from my dear old Aunt Millie and decide to plunk it all in the market then where we are in the cycle makes a hell of a difference. If instead I decide to pay you to manage it for me, then you damn well better get it right or I'm going to be pretty pissed off. So to professional money managers where the market is going in the next 6 months or 1 year or 2 years is of critical importance, no question.
But that isn't the way most investors invest. Most folks put some small set amount into their 401k every month, hopefully in wise choices like SPY or DIA, rather than chasing last year's hot mutual fund. In that case, it doesn't matter so much, because they will buy some shares at market tops, some shares at market bottoms and most shares somewhere in-between. In the end, they will benefit from the long-term upward trend, including, most importantly, dividends. I would submit to you that even if you took 1929 as your starting point, someone who invested a set amount every month over the next 25 or 30 years would have done fine. And that would be the worst case scenario. Take 1950 or 1970 or 1990 as your starting point and the numbers would look even better.
Could you do better if you got out and stayed in cash during bear markets? Sure, if you could call them accurately. The problem is no one has been proven to be able to do so over a lifetime, even you Barry. Anyone who could do so with unfailing accuracy would be richer than Buffett.
Posted by: getting older | Jan 26, 2008 11:47:23 AM
