Long-term Pessimism in the Economy
Bulls and Bears. They’re usually easy to spot on the internet. The Bulls have months-old sounding pitches for how to get rich with stocks and real estate (I’m amazed that on satellite radio, I can still hear commercials touting some guy’s course for buying and flipping houses and making boatloads of money!).
The extreme-Bears are easy to spot, too. Their websites usually have ads for survival food, retreat land and home construction, guns and ammo and radiation detectors.
Somewhere in the middle is Robert Kiyosaki, who wrote Rich Dad, Poor Dad
In an earlier column, I stated that it was time to sell all nonperforming real estate. My market indicator? A checkout girl at the local supermarket, who handed me her real estate agent card. She was quitting her job to become a real estate professional.
As a bull market turns into a bear market, the new pros turn into optimists, hoping and praying the bear market will become a bull and save them. But as the market remains bearish, the optimists become pessimists, quit the profession, and return to their day jobs. This is when the real professional investors re-enter the market. That’s what’s happening now.
From an article posted July 22, 2008.
Am I optimistic for the long-term? Absolutely not. I still believe we’re due for the mother of all market crashes, and that the U.S. economy is running on borrowed time — and I do mean borrowed. I think most baby boomers are in serious financial trouble, and that oil will climb above $200 a barrel. Inflation will also increase, causing more pain for the poor and middle class.
The Fed is flooding the market with nearly a trillion dollars of liquidity, which is why I believe gold under $1,200 an ounce and silver under $30 an ounce are bargains. Gold and silver should peak and decline before 2020, completing two 20-year cycles. My exit is to sell silver around 2015. I plan to hold onto gold, income-producing real estate, oil wells, and stocks.
Most of us know the bull climbs slowly up the stairs, but the bear jumps out the window. I believe the bull is still climbing the stairs, and the bear hasn’t jumped yet. But rest assured that it will.
Agreed.
Posted in EconomyTags: Bear Market, Bull Market, Crash, Depression, Economy, Recession