“God, Am I Sick of THESE Losers!”

Steve McDonald By Steve McDonald, Bond Strategist, The Oxford Club

Slap In The Face Award

Transcript:

The market has gotten so high, and the jitters out there are so bad, it’s going to take only a good rumor to get a sell-off going.

So we need this slap.

The slap this week goes out to all the folks out there who listen to market forecasts and the people who make them…

You know, the guys who go on TV and pretend to have a clue about where the market is going. And there always seems to be an abundance of people who want to believe it’s going down the drain and never coming back.

This type of “doomsdayer” is usually selling his or her “hack” for avoiding the final crash or making money on it.

God, am I sick of these losers!

But occasionally, we get treated to one who knows the market is going to the moon. And – naturally – his product will get you there and hopefully back.

And the most amazing part of both scenarios (the market crashing and the market heading up) is that both are right, well 50% right.

The market will sell off, and the longer we go without a sell-off, the bigger you should expect it will be.

The market always sells off. And you better hope it does, or there will be no great buys – ever.


On the upside, yes, eventually the market will achieve what some will consider a moonshot.

If you were in the early ‘90s when 5,000 on the Dow seemed unapproachable, wouldn’t 22,000 seem as achievable as going to the moon?

But no matter how many times stocks and bonds sell off, the small investor views it as a calamity when it is a buying opportunity.

And no matter how high the market runs, some sit it out because another loser predicted a crash.

And many financial advisors think that they’re money soothsayers. They aren’t.

Clients are attracted to people who appear to know the unknowable: where the market is going.

There is no way a machine as big and complex as the stock and bond markets could ever be predictable. It just can’t happen.

But what does happen occasionally is some guy will get lucky and hit a sell-off on the head, and a star is born!

He writes book after book. He is lauded as the new messiah, and money pours in from every conceivable place to be managed by him.

And he’ll never be right again.

I have lost count of the geniuses who have been right only once in their careers. But it is so rare that anyone is right. The industry puts them on a pedestal and worships them until the next guy lucks into another one.

Investing is about numbers, discipline and planning. Let this year’s money genius get hold of your ear, and you’re done.

No one has ever consistently predicted anything about the markets, and no one ever can. Yes, it is that simple.

So, for God’s sake, turn off the TV, or at least watch a good movie – but please, not the money geniuses on TV.

Good investing,

Steve