www.Contraryinvestor.com has a nice write-up of the demographic nightmare facing the stock market. As www.zerohedge.com has been reporting for a while, the insider sell-to-buy ratio has been exploding recently, as insiders read Rosie. So to counter the funny-money Santa Claus rally that’s popping on the Street today, take a read of what the Age Wave suggests for the future. When contemplating the miserable yields available under ZIRP (though surfing the yield curve can be fun in a tax-deferred way), remember that some coke head somewhere once wrote a book titled “Less Than Zero,” which probably summed up his knowledge of mathematics, but also sums up what might be expected from equity returns over the next decade…. My question: will the Big Bottom, when it finally arrives, be a buying opportunity? It has to be, doesn’t it, by the iron laws of behavioral overshooting…?
Just Where Is The Equity In All Of This? – contraryinvestor.com
"My question: will the Big Bottom, when it finally arrives, be a buying opportunity? It has to be, doesn’t it, by the iron laws of behavioral overshooting…?"
ReplyDeleteBut sometimes the system really does break down and does not recover in the same form. Sometimes it is gradual — British Empire — and sometimes it is sudden — Hapsburg Empire, USSR.
The question is whether the current form of capitalism will survive. Ravi Batra predicts its won't. In The Downfall of Capitalism and Communism (1978) he got the latter right. Will he turn out to be right about the former, too?
Someone commented re: Wikileaks that the revelations showed how similar the USA and Russia are now, both oligarchies run by gangs of elites with disproportionate access to resources and little in the way of ethics. Perhaps we are just in the process of completing the convergence. I don't know if you'd call it fascism or feudalism. But great inequality breeds actionable discontent over a long enough time horizon. It took Europe hundreds of years to overthrow the feudal lords and the Catholic church, largely as the result of a renegade priest with a printing press who spread a radical message about human equality. Information travels so much more quickly now.
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