Stocks Down, Be Happy

I remember back when the NASDAQ was out of control, racing high, standing with a friend in Times Square who was watching the electric ticker tape going by---and that friend said, truly, “It can only keep going up. This is the new paradigm. The market will only go in this direction.”

There was such a mania. It was the Clinton years. People were fat with high portfolios. Even in NASDAQ. And my friend, and other people, honestly thought growth would never end.

WHERE DO PEOPLE GET THESE THOUGHTS?

It’s like a child thinking cupcakes, mountains of them, will forever be brought to the bedroom by some tireless mother-baker-giver.

It isn’t possible.

But here is the good news (on the bad). I was talking to a doctor today---and he had the glum words on his mouth about how everyone is going to be wiped out. Now.

And I thought, again,

WHERE DO PEOPLE GET THESE THOUGHTS?

It’s like children who fear that cupcakes are over, the oven used to make them is now burning down the house and mommy and daddy are fried in the blaze.

Possible? Yes. But we already had a huge blow out less than a hundred years ago. (And it did bounce back eventually.)

TEACHING now---ECONOMICS 101: What goes up, comes down. And vice versa.

This will never change. It reacts to the tides. These tides are about 17 years long. Some say 14 years. Some say 11. Some say they don’t know. Whatever---that’s the fun of the stock market. You don’t know.

But there is no such thing as the never ending vector in one direction.

Can we all agree?

Now go eat some fat free yogurt.