저자: GROW DOLLARS · 외국인
다듬은 글
the thing about the underpinnings is they always look terrific in 1929 the market didn't Peak when they thought the underpinnings were terrible they peaked when the Market's enthusiasm for the underpinnings was approximately the highest it had ever been in history in 2000 in March the world uniformly including the boss of the Federal Reserve Alan Greenspan they all thought the system had never been better at the top of the housing bubble in 07 banagi and the boys thought the U.S housing market had never declined unquote it merely reflected a strong U.S economy the underpinnings were great they have never gotten it right the Federal Reserve in particular has never had a clue about asset bubbles it doesn't even address it they act as if they don't exist except on the upside they occasionally take credit for the wealth effect helping the economy along and it does right there is an income effect and it does help the economy along and Greenspan Bernanke and Yellen all took credit uh explicitly for helping the economy along what they never did is they never took discredit for the reverse side the market has been reverting mechanism and eventually it goes back to a fair price and when it went back in 2001 2002 it had a dreadful negative income effect when the housing market collapsed and it took the equity Market with it it had a double pronged negative effects on the economy so it had a much bigger uh impact on the economy then had occurred in 2000 and this time we're really playing with fire because this time unlike 2000 we have an overpriced bond market Jim Grant would argue the most overpriced in 4 000 years we have in my opinion and that of many other bubbles students the most overpriced U.S Equity Market in history we have a housing market that three weeks ago reached the same multiple of median family income as it did in 2006 at the peak of the housing bubble and we have Commodities that have recently run a muck so that the Goldman Sachs index of non-energy which is food and metals which are pretty important have just equaled the peak of 2011 which was said to be one of the super cycle commodity events so this is the first time we've ever risked three and a half asset classes bubbling at the same time if and when we we reach a period of pessimism the potential unraveling in terms of perceived wealth is much greater this time than it will have ever been before we could take out the rivaling 1929 and 2000 I think we've gone way past that there are examples of large-scale craziness and meme investing Etc for which there is simply no parallel in 1929 even or or 2000 2000 had pet.coms and and they were kind of glorious but they were scores of millions or a few hundred million we have crazy things now that are billions and in some cases tens of billions there is nothing like that at scale even adjusted per current dollars in 1929.
Market is a self-correcting mechanism but it's a little wonky in the time it takes sometimes it corrects pretty quickly and sometimes it corrects incredibly slowly and and that's the problem but if you go back to 2000 which is the the previous leader in speculation let's say what happened there is the market pitched it peaked in March of 2000.
and between March and September the pet.com basically went out of business the the internet stocks basically went down 80 but the whole.com the whole TMT bubble uh burst and the industry which had been 30 of the market declined by 50 percent the smt was unchanged and you could have said during that five-month six-month window oh isn't that healthy they're selling they're selling the flakiest pet.coms and uh they're buying a Coca-Cola what's not to like about that that's exactly what happened and I I like to think of them as the kind of pessimism termites and they they add through the craziest first and then the junior growth stocks and then the intermediate growth stocks and then finally Cisco which was for eight minutes or so the biggest company in the world by market cap and they were all down collectively 50 and so for the s p to be flat in September it meant that the balance of the market was up 17 percent so that looked incredibly healthy but then the termites reached the broad market and the entire 70 percent rolled over and fell 50 in two years and and the NASDAQ was down 82 percent I think the interest rate argument is an explanation of how we get there in behavioral terms it is not by any stretch of the imagination of justification you don't justify anything by taking the the most overpriced asset in the history of man the bond market I'm saying compared to that we are merely very overpriced and therefore relatively cheaper that is very cold comfort um Solomon Brothers an important firm at the time of in 1989 sent around a head Squad justifying the Japanese stock market which was approaching 65 times earnings we were told at the time the the data was represented as 65 times earnings that's had never previously sold over 25.
and so that was to say the least The Real McCoy and this team went around pointing out that the raids in Japan were so low that 100 p e would be fair of course the collapse that followed in in land and bonds and and stars was Cosmic it still hasn't reached the 1989 level in either their real estate market or their stock market which reminds us of the cardinal rule and that is the bigger the bubble the most ingenious the arguments and the bigger the bubble the most extended and painful uh the decline this is the most broad as I said asset bubble of all time with three and a half of the four major asset classes clearly in severe bubble territory right and thinking that you have no alternative but pick between one of the four bubbles is a pretty Grim way to view life I I get the argument so pick a bubble they'll all go together probably and you will suffer a lot of pain and the intellectual content of that argument that they were all bubbles so we had to pick the least bad one it will resonate in your head as as the market unravels the market abhors long sideways movements as we all know it either goes up more than you think or down more than you think you can always hold out hope for an extended sideways movement but it it never seems to arrive let me just say by the way I have enormous sympathy for participating in a bubble right when I was young in 1968 69 we had a spectacular and mini bubble in tiny stocks and they all quadrupled and made us rich and then they all blew up together and most of them went out of business and I was just out of business school and I made a small fortune almost enough to think about retiring to England and then in the space of about nine months I lost everything back to two thousand dollars and was lucky to cover my my leverage and get out without a huge debt it was thoroughly exciting probably the most exciting time I've ever had in investing so I completely sympathize nobody who is Young and investing and making money is going to listen to some old Kaja tell his War stories about when he got wiped out I get that so there's nothing that I can say that will will cause anyone to change their behavior the power the psychological power of a bubble to suck everybody in is prodigious and and we've known that since the Tulip bubble and it will never stop I would look around and ask the question what is the least bad and the least bad is Emerging Markets it's a little overpriced absolutely but it is it is at one of its three points of Maximum difference to the S P 500 each of the other two examples worked out wonderfully well in favor of Emerging Markets conversely when Emerging Markets was at a peak which it was in 07 it sold at a premium PE to the s p you can have very bad things happen which they did but Emerging Markets is relatively very cheap and pretty much close to fair value and the other thing is value versus growth low growth stocks have been pummeled by high growth stocks for the decade ending in in 2019 and then in the year 2020 they had the worst year by far ever so you had the worst decade followed by the worst year and the ratio of value or low growth to high growth was also at the co-equal highest widest it had ever been with the 1974 and the outcome after 1974 for Value was wonderful so I would look at the intersection of those two ideas if you could buy the value stocks in the Emerging Market universe but you can and it includes some very high growth potential countries like China and collectively they will have a higher growth rate than the developed World almost certainly and they sell at a huge discount I would say they are modestly cheap in an s p world that is extremely overpriced and you could lock them away for 10 years or 20 years and and really expect a decent return which I would recommend and since there is no hope of persuading people to actually get out of stocks that would be the best I could offer but for those three people out there who have a will of Steel I would say also have a cash reserve of 20 or 30 percent as much as you can psychologically bear to take advantage of much cheaper prices sometime in the not too distant future for the next 10 or 20 years though I think the s p of course will underperform just as it had a tough time from 2000 to 2010 where it had a negative return an Emerging Markets incidentally Beat It by 11 or 12 percent a year compound
Comments 0