Riding on the Bull Train
I don’t like just preaching to the choir. So, as I work on articles on this site, part of my mission is also to comment on articles on permabull sites to vainly see if it is possible to pound some sense into them. While I know it is not, the following is an amazing example of how bullheaded they can be.
I spend a lot of time at that, too, because I’m on a mission, not just asking for patronage to create a website (though creating the website to supply you with articles about where we’re headed and what we really need to do is the biggest part of my mission). I comment in those other places because I hope there will be a few readers there that will become converts to rational thought. I’m not sure there are, but making converts is the only hope there is for getting out our endless rinse-and-repeat recession-recovery cycles.
I assure you, doing so is without reward.
An exercise in futility just to test how deep economic denial runs
Here is how stock-market permabulls ride the bull train into an utter train wreck. The guy below has endlessly ridiculed me when I’m on his site for saying the market was going to crash and then for pointing out how badly it was crashing. He’s still telling his 25,000 bullheads to stay the course in stocks. I present the following as an example of how extreme the Permabulls are and how irrational. I do so in hopes that it supports my argument over the years about how DEEP our society is in economic denial.
(My comments within his quotes, which start from his most recent article and work back toward the first days when the coronavirus hit the US, are highlighted in brackets. This was written right after he commented about the punishment I was taking in the form of ridicule for my bearish views. Remember, this guy has about 25,000 followers!)
First, for amusement, here he and his follower (one man representing the many in this case) are trying to climb the S&Polish escalator when it is going down:
For the most part, each quotation below is a summary of one article. (And I’m not whining about being ridiculed. I just think it’s quite ironic and almost funny.)
My written response to his ridicule of me for being bearish
Here are summary quotations (of the kind you like to do [from my articles to criticize them out of context]) from each of your articles during the present crash all the way back up to the top of the escalator from which you’ve fallen as you counseled your readers to remain invested in stocks, starting with this article:
Now that we have seen a 30% decline in stocks [as I said you would], the guessing and speculating on declines of 40% to 50% will begin [as I’ve also already said is likely]. Despite the mania over the virus … let’s not lose sight of reality…. We do know that history tells us that great wealth is achieved when some can take advantage of situations just like these. They should be looking long and hard at slowly buying in at these low levels as they build a portfolio that they can look forward to when they eventually retire. That is how an individual builds wealth over time.
Keeping it all in perspective, we put the pieces together to weather this storm of FEAR…. When it comes to investing, my strategy does not include speculation or emotion… Speculation, fear and overall emotion trump ANY other view presented, including facts…. So it’s back to what successful investors do and what has helped in reaping the lion’s share of this 11-year bull market. Watch the price action…. The S&P 500 experienced its first 10.0%+ correction since December 2018 and the fastest 10% decline from record highs in history. Perhaps it also was an extremely overbought market that simply needed to pause and nothing more. That fact has been overlooked by many due to the virus issue. [Still just a correction of an overbought market and “nothing more?” Still just a pause?” Is that still a “fact?” Then enjoy the rest of the pause because it’s going to be a looooong one!] … ALL during this BULL market, I viewed such pullbacks as buying opportunities, emphasizing solid fundamentals that remained supportive of the equity market…. Remaining confident during last year’s trade-related pullbacks paid off handsomely as it was best to stay with unwavering conviction…. That same strategy applies today. Unfortunately, the potential complications surrounding the coronavirus are more unpredictable and have made investors much more emotional. My concern isn’t with what I foresee as potential global economic impacts. For sure there will be many. My concern lies with the uncoupling from reality that the never-ending fear rhetoric is adding to the storm.
How about your uncoupling from reality in thinking those fears that the entire world is gyrating in are not going to destroy the stock market that was built on tinder, and how about your total unreality regarding the bedrock fundamentals? Back to you, going further back in time:
While the “virus” is now called a pandemic, what we have on Wall Street is a ‘panicdemic’. While it is extremely difficult, keeping the situation in perspective is a must now….. Congratulations to the “Top Callers”. After hundreds of S&P highs that were set in this bull market, 47 of them in the last 13 months, they finally got it right. [And you were still getting it wrong by counseling everyone to stay in stocks! Can’t even get it right when you say the top callers were right.] Their losses have to be staggering…. [Right now, yours are staggering!] But here is their opportunity to put a drop in their buckets. I hope they don’t fumble this away by using illogical theories. [And, so you counseled your readers to stay in, and you and those who follow you poured OUT several more buckets.] The S&P 500 closed the week at 2,711 and is off 19.9% from the all-time high, but dropped by 26+% on a closing basis and is in a bear market. The entire move took four weeks to take place. [And that, which was already in, is what you called AFTERWARD a mere “correction” and perhaps a needed “pause.” Yet, you had also said the very same thing before:] The ‘FEAR’ component of the current market action gives me pause. Unfortunately, the potential complications surrounding the coronavirus are more unpredictable and have made investors much more emotional. It is the explosive FEAR component associated with this virus selling that is more concerning…. Facts tell us until proven otherwise, this time frame should be viewed as a CORRECION in a BULL market trend. The next few days will determine if the interim lows set in this correction will hold. That commentary was the same commonsense approach that correctly called this bull market for 6+ years while reaping huge rewards for investors.
Interim lows in a correction, huh?
“This” Bull market still in?
That was the same repetitious and devoid advice you gave days before:
Thoughtfulness not ‘panic’ is what is required now… ‘My concern isn’t with what I foresee as potential global economic impacts. For sure there will be many. My concern lies with the uncoupling from reality that the never-ending fear rhetoric is adding to the storm.’ I was hoping my worst fears would be avoided. That is not the case. It can now be said that this crisis can be much bigger than a financial crisis because the social distancing mandates are both a supply and demand shock we have not seen before. [It almost looked like you were catching on and were going to change your position, but then see all your quotes above to know you doggedly stayed the course all the way down … and are still falling, in spite of the fact that …] I heard a comment this morning that was simple and to the point. ‘We have never seen anything like this in our lifetimes.’ The stock market agreed and began sending everyone a message. [But you apparently didn’t get the memo because you took a lot more punishment:] No sense in debating what is going on, that statistic says it all. The obvious conclusion that everyone came up with, avoid equities at all costs. [Yep, that would have been the obvious conclusion, but you missed it entirely because you are so in touch with reality:] Now that we have seen a 30% decline in stocks, the guessing and speculating on declines of 40% to 50% will begin. [It seems like YOU are the one who is as repetitious as a broken clock!] “Let’s not lose sight of reality. Making blanket statements on how to approach this event will be the norm now. For the most part, they will be wrong. We do know that history tells us that great wealth is achieved when some can take advantage of situations just like these. [Broken clock!] We respect the price action on the way down just as we respected the upward price action for the many years during the Bull market…. The only thing being bought was toilet paper. Stocks were back on sale at the outset and stayed that way until the close…. We are witnessing moves that occur in a year take place in a day…. The VIX closed at a record, surpassing the 2008 financial crisis highs…. Common sense never goes out of style, it will be required to navigate this BEAR market, just like it was needed in dealing with the previous BULL market. Either way, using common sense is the only way to cope with the present situation.
And your uncommon sense told you and everyone who follows you to stay in for the ride, which is now outlined in all the comments above this last one. One would have thought everything you said in that last article might have been a clue. Then you could have gotten out with half the fall, but no way. Down the escalator you continued to roll and all your followers with you, laughing all the way about how much fun banging your head was.
Intermission for comedic (or painful) relief:
The worst part about falling down a stock market that you believe is an escalator up, is that you can fall forever because it keeps creating new steps underneath you.
And now back to our regular programming:
You claim it’s time to deal with the facts of the bear market, and then tell everyone to stay in … same advice you gave in the bull market, now applied to the bear market as though a single thin idea applies to all situations.
I don’t find that to be common sense at all. Your advice at each new waterfall amounted to, the market looks about to plunge again, so use your common sense and take the next ride over the falls! It’s the most absurd thing I’ve ever read.
As you concluded, “No need to guess what may occur; instead it will be important to concentrate on the short-term pivots that are meaningful. However, the Long-Term view, the view from 30,000 feet, is the only way to make successful decisions.”
By which you meant, “Stay invested in stocks! Ride this one out, boys!” And you ridicule the person trying to pound some common sense into you (for your riders, not “readers” sake) when I yell, “Get out of the boat, people! What’s wrong with you?”
So, down you went plunge after plunge. [Escalators are fun for idiots.]
And your continued advice amounted to: “Stay in the for the ride. Use your common sense and keep crashing over waterfalls because someday they’ll end and then you can spend years in recovery.”
I do expect to see some of this wild volatility diminish as these funds finally unwind their holdings.
That didn’t happen. It got worse. Much worse. But, hey, you’re the bright one.
Now don’t get me wrong, anyone new to the Bearish mode should certainly share their concerns and we should ALL listen to their thought process. The landscape has changed and they should be heard.
You didn’t listen to any of them at all, except to try to assuage their fears and counsel them to stay in the market because fearing waterfalls is for cowards without common sense. Common sense tells you to stay in the boat and GO OVER THE EDGE!
Next article [titled]:
“The Trend Is Still Your Friend“
I don’t even need to quote more of that one. That is what you said before you wound up having to say everything above, which came after, since we are stepping back in time. All I can add is to say, “With friends in the end like that, who needs an enema!”
Next article [titled]:
“Irrationality Isn’t Always Associated With ‘Exuberance‘”
No, it’s associated with you!
“At this point in time, I will stay with the notion that the global economic pickup has been ‘delayed but not destroyed.'”
Bad notion. But you stayed with it through all of the above and are still staying with it.
And that is what it’s like to ride the Bull Train!
And it is why you deserve every pounding you get.
I spent weeks trying to talk sense into him and his readers, partly as an exercise to see how far irrationality and economic denial can go. Here is what trying to help them out is like. Here he is in person. Some people just cannot get it!