Permabear; It takes A Special Kind Of Stupid To Be One

Permabear

Being a Permabear is a recipe for disaster

It takes a special kind of stupid to be a Permabear; the one that even a thousand hard slaps will not alter. Perma-Bears have a death wish; they are begging to be taken to the cleaners for nothing else can explain this short-sighted way of thinking. A simple examination of any long term chart will prove once and for all that being a Permabear is never going to pay off.  There is not one long term chart that can prove that taking a bearish stance, in the long run, has ever paid off.

PermaBear losing option according to Dow long term chart

Whatever trend line you use, the 1st or the second one, the above 100-year chart of the Dow clearly proves that  Permabears are in the wrong when it comes to investing.

The solution is simple

Focus on the simple factors, for that is what helps determine the trend; factors such as mass sentiment, and extreme patterns (technical analysis) on the charts.  The news is not an essential factor; in fact, toilet paper has more relevance than news; at least it serves a noble function; one cannot say the same of news.

Anyone that advocates giving into fear should be thrown headfirst out of the front door(figuratively speaking that is) and never allowed back into your house or mind; fear never pays off; only the vendors of fear will make a handsome buck, the buyers will lose their pants, their shirts and their knickers too.

Marc Faber is a classic example of A PermaBear that is full of rubbish

This dude has made prediction after prediction calling for the mother of all crashes since the inception of this bull (2009) but the only thing that has crashed so far are his predictions of a crash.  He would probably make a very good science fiction writer, for he seems to spend a lot of time concocting scenarios that have a very low probability of coming to pass.

“You’ve been saying the same thing essentially since 2012 and have been consistently wrong,” said a frustrated Nations. He pointed out that on Tuesday, the Russell 2000 hit an intraday high and the Nasdaq composite reached an intraday and closing high. The Dow and came within points of their respective records.

“If someone piled into stocks in 2012, 2013, 2014 or 2015 they’ve done pretty well. Why were you so wrong then, and why should we think you’re so right now?” Nations asked.

Faber defended his call saying, “I warned of a correction in 2012 and we had one.” A correction is defined as a move of 10 percent or more from peak to trough, and in April 2012 through June 2012, the S&P 500 fell more than 11 percent.

“I tell you when all is over people will love me for having warned them to have all their money in stocks,” added Faber. “I’m used to people like you who always attack me.”

“You’re accusing me of being wrong? I laugh at it,” Faber concluded. CNBC

Here he states that we are going to experience a great recession in 2018

Turns out once again the only recession was in his predictions, which for now, are the only thing that has been in a bear market. Hence if you are a Permabear on his ability to predict the market direction it could actually pay off.

Then he goes on to state the party is going to end in 2018

Random Musings on being a Permabear

First of all, we hope that the majority of our subscribers are starting to perceive that succumbing to Fear is a dangerous strategy to adopt.  Life and investing should not be stressful; stress is something that every Tactical Investor should abhor.  Moreover, remember, stress comes down to perceptions; alter the perception and one can shift from being stressed to being serene.

Experts love to push the argument that investing is hard and that it takes forever to master this art. Remember that investing is an art, not a science and art is meant to be enjoyed.  So are the masses starting to jump on the bandwagon after this strong turn around; the obvious answer would be yes. The not so obvious answer would be no Continue reading. Turns out at least in the first half of 2019, the not so obvious answer would be the right choice. The masses are still nervous and until they start to dance on the streets, every strong correction should be viewed through a bullish lens.

Conclusion

This bull market is unlike any other; before 2009, one could have relied on extensive technical studies to more or less call the top of a market give or take a few months; after 2009, the game plan changed and 99% of these traders/experts failed to factor this into the equation. Technical analysis as a standalone tool would not work as well as did before 2009 and in many cases would lead to a faulty conclusion.  Long story short, there are still too many people pessimistic (experts, your average Joes and everything in between) and until they start to embrace this market, most pullbacks ranging from mild to wild will falsely be mistaken for the big one.

The results speak for themselves; the majority of our holdings were in the red during the pullback, but now they are in the black, proving that one should buy when there is blood flowing in the streets. It is a catchy and easy phrase to spit out but very hard to implement, because when push comes to shove, the masses will opt for being shoved.

Other Articles of Interest

US Debt To GDP Means Nothing To Bonds & Stocks  (Feb 12)

Technology-Driven Deflation Will Kill The Inflation Monster (Feb 7)

Business Investment & Stock Market Uncertainty   (Jan 31)

Dow 30 Stocks; what are they saying about the markets  (Jan 30)

Stock Market Bull 2019; Follow The Trend & Avoid The Noise   (Jan 29)

Long Term Trends & Bull Market Bear Market Nonsense   (Jan 16)

Bull & Bear Market 2019: which one will prevail  (Jan 14)

Stock Market Crash-Media Lies And Ignorant Experts  (Jan 11)

Market Correction Vs A Back Breaking Market Correction (Jan 3)

Bitcoin Crash: Is Bitcoin Bull Dead Forever (Jan 1)