Use access key #2 to skip to page content.

TMFPostOfTheDay (< 20)

Bubbles: Don't Take a Bath



December 13, 2013 – Comments (2)

Board: Macro Economics

Author: MrCheeryO

..By my count, we now have a stock bubble, a bond bubble, a gold bubble, a (new) housing bubble, a Bitcoin bubble, a debt bubble, a profit bubble, a margin bubble, a Fed bubble, a dividend bubble, a social media bubble, a health care bubble, and an [insert thing you don't like] bubble... Housel, TMF

I basically agree with Housel. JMO, but the eventual tapering will be a once in a decade opportunity to buy good companies with actual cash flow etc. when the markets panic and way overshoot to the down side. I vividly recall the Fed starting to slash rates in January 2001, the equity markets shooting straight up on the news. The usual garbage about "don't fight the Fed" was the conventional wisdom of the day. Of course that was exactly the time to worry since there was good reason the Fed was cutting in an increasingly panicky way, the Greenspan put failed. But one last gasp of irrational exuberance.

Bought some Sun Micro-Systems just as a trade and the share price doubled in a week while on vacation. Sold as soon as I got back since it was obvious who the suckers at the table were. Bill Mann of TMF wote a great piece on that at the same time. Brk. languished, Buffet was washed up yet again.

Still, Housel's advice on humility is always a good one and history might not repeat itself only in reverse of 2001. Will see. Just imo but there will be a great buying opportunity especially if blood runs in the streets, be greedy when others are fearful. About "bubbles" of every kind. Plays on the "fiat currency" meme should be especially profitable imo.

Still, humility is always in order, we'll see. Plenty of time to position one's self. 

2 Comments – Post Your Own

#1) On December 13, 2013 at 6:14 PM, constructive (99.97) wrote:

"The usual garbage about "don't fight the Fed" was the conventional wisdom of the day." 

Garbage? Have you ever tried fighting the Fed, either in the equity or debt markets? 

Report this comment
#2) On December 13, 2013 at 10:14 PM, awallejr (37.00) wrote:

And in 2009 and until recently people argued "ignore the Fed."  Personally I am glad I ignored those.  I didn't start making money until AFTER I decided to listen to Bernanke and ignore everyone else.

Report this comment

Featured Broker Partners