The house always wins in Vegas and on Wall Street.
Paul Farrell breaks ranks and speaks against his own interest. Aligned. here:
8 reasons Wall Street loses another 20% in this decade
ARROYO GRANDE, Calif. (MarketWatch) -- Remember Charlie Ellis' famous 1975 classic: "Winning the Loser's Game: Timeless Strategies for Successful Investing?" Like Napoleon Hill's "Think & Grow Rich" everyone on Wall Street has read it.
Well, guess what: Charlie failed us the past decade. Wall Street lost trillions, lost 11% of your money. Adjusted for inflation, Wall Street lost 20% of your money. Warning: Wall Street will do it again by 2020.
The growth priced into stocks
Once-clear leading economic indicators such as the Treasury yield curve are now widely disputed. But what growth trend is priced into stocks?
First, let's review Ellis' famous 10 strategies for winning at Wall Street's casino: "Never speculate. Your home's not a stock or piggy bank. Save more money. Your broker's not your friend. Never trade commodities. Don't chase hot stocks. Bonds also ride up and down. Don't invest for tax benefits. Write goals and stick to them. Never trust your emotions."
You probably knew them by heart. What happened? This insider gave you 10 rules for beating the Wall Street casinos ... and still you lost 20%.
But in your defense, even if you broke all 10 of Charlie's rules the past decade and lost 20%, it still wasn't your fault. Wall Street was conning, scamming and manipulating you all along, all day, every day for the past decade. And yet I'll bet you're still an optimist, gullible, trapped in Wall Street's seductive pseudo-optimism, one of the majority of Americans who believe the market will go up 20% or more in 2010, "confident better times are ahead."
Best advice today? Burn Ellis' book. His next edition should be titled: "Losing the Loser's Game: How Wall Street Got Rich Between 2000 and 2009 Because Main Street Investors Are So Gullible, Stupid and Predictably Irrational." You cannot win at Wall Street's "Loser's Game." The past decade proves it. The house always wins in Vegas and on Wall Street.
How not to lose 2010-2020? Avoid Wall Street; don't play by their rules
So why bet on the house? Why bet with the Wall Street casino for another decade? Why? You're betting in a rigged casino. Worse, they keep adding powerful new tools, scams and algorithms to their "financial weapons of mass destruction" arsenal, as Warren Buffett calls this mysterious $670 trillion global shadow banking world of derivatives. You cannot win.
Statistically, the odds now predict Wall Street losing another 20% of your money in the next decade. The momentum's headed down. So, what should you do? Sell all your stocks, ETFs, bonds and funds. Get out of commodities and gold. Sell.
You think I'm crazy? Imagine: You're a 50-year-old boomer. Flash forward to 2020. Retirement time? But you've lost another 20%, while those Wall Street Fat Cats will be paying themselves record bonuses averaging half-a-million annually for all 10 years from 2010 and 2020 ... but you can't retire. They got their bonuses siphoning money out of your accounts.
What do you expects some kind of divine intervention will save you? Get real, consider the "Swiss Family Robinson" scenario.
No, you cannot get back to even
My guess is you're still smiling about that 60% short-term gain in 2009. You're still an optimist. You really believe you can "get back to even," like Jim Cramer and other hucksters are promoting on the Wall Street propaganda machine.
Yes, your portfolio did ride up on the 60% rebound wave in 2009. You're happy. Short-term gratification. You believe it'll continue. Wrong. You're forgetting the massive losses of more than $10 trillion in market cap the last decade since the Dow peaked at 11,722 in 2000. Worse, you're forgetting the Dow's still about 30% under the 14,164 peak in 2007.
What if you don't sell? What if you take the risk and gamble Wall Street will change its evil ways. What if you ignore me? What if you gamble and you lose another inflation-adjusted 20% by 2020, like you did between 2000 and 2009? Or worse, what if you're close to retiring or putting kids in college, and you lose 40% like so many did in the 2007-2008 meltdown?
Studies prove that nobody -- neither Wall Street pros nor Main Street amateurs -- can predict long-term trends. But we do know Wall Street's high-frequency quant traders are making thousands of millisecond bets every second gambling on short-term shifts in volatile markets.