I Am No Raging Bull

My last article had a lot of comments. That's great! My thanks to all who left comment, doesn't matter if you agree with me or not. I want to answer to some comments here, in no particular order.

First of all, I am no raging bull. And as my readers know, I'm not a "buy and hold" investor, although I can hold positions for a very long time: my Apple (AAPL) and Ebay (EBAY) positions are almost decade old. Actually, I started as a "buy and hold" guy in 1998, and thought that I'm on top of the world. Then March of 2000 came. I didn't do real trading until 2006. Thing is, there is a supercycle on the stock market, about 35 years long. Each period of the cycle consists, roughly, of a bull market and a sideways market, each 12-17 years long. Last bull market finished in 2000, now we are in sideways phase.

I don't think we are going to see inflation soon. All data is screaming deflation. My advice to those who doesn't believe that deflation can happen with fiat currency, read about Japan and think again.

Yes, a lot of people lost everything during Great Depression, had to change their whole life, definitely didn't have any money to invest. But majority of people in the country still had jobs and many of them still could invest. But they didn't anyway, stock market was something people thought too risky until 1950s. And then again, in the next sideways market, BusinessWeek printed and article "The Death of Equities" in 1979. We need to follow Buffett's advice, be greedy when others are fearful.

We are not at this point yet. The moment to buy is when everybody tells you that stock market is dead, that it's going to zero, that world is going to end soon.

Last but not least, I might be too early. New York Times might just print an article "Great Depression II Is Here" sooner than common acceptance comes. I mean the article on the front page, with a huge headline. It's possible. The closest headline I found in NY Times archives was printed on January 1, 1932. Market went down more than 40% down after that. But if you bought on January 2 of that year, you'd have a good profit by summer of 1933. We can't expect to catch an exact bottom. Investment is not an exact science. We just need to earn more than to lose.

Full disclosure: at the time of publication author long positions in AAPL and EBAY. Positions can change any time.