One of our fellow Slopers, Big Red, left the following question in the comments stream. I’ve boldfaced a few particularly salient portions:
Thanks for the chats, @TimKnight! It is always soothing to see and hear what other bear(s) are going through…and don’t worry, I won’t leave as a subscriber if I lose money (40% last week alone) as I believe you are one of the most enlightened voices on the Markets anywhere. My losses are my own. I knew when to get out and I ignored my own signals. I am in training for the next time and am *visualizing* getting out (my biggest problem)! 😛
That said, I feel more comfortable on the bear side (making 2M and losing it in 2008 because, once again, I didn’t know when to get out). 🙂
What do you do (not now, because I agree with you the markets still have more to go downwards) when the markets finally turn and things start to look bullish (the “green shoots” haunt me to this day as I would still have that 2M if I had paid attention). It might be an interesting post – speculating on the bear side vs. the bull side. I have my own thoughts but I’d love to hear from someone who is better than I!
Do you have a bullish playbook? I am working on mine – which has to be different than the bear side! I have a completely different lineup of stocks and strategies for the bull side (which I am continuously preparing for).
As the saying goes, there’s a lot to unpack here, so I’ll just break it down one piece at a time.
First of all, thank you for your kind words. When the market is getting wiped out, I get all kinds of praise and thank-you notes heaped upon me. When the bears have suffered a D-Day invasion like last week, it means vastly more to me to hear some words of encouragement, and for those, I am most grateful.
It’s very interesting what you bring up about having a bullish playbook. I don’t think I’ve really written about this, but back in 2008/2009, I had a very crystal-clear idea what my game plan was going to be. Let me state a few things at once:
- Not a single element of that plan went the way it would;
- Even in March 2009, I believed the market would ultimately go lower;
- My view was that we were going to go through a painful but vitally-important “cleansing stage” which would give the markets a very important bottom in a few years (I don’t remember precisely what it was, but 2012 or something like that).
There was one gargantuan, enormous, huge, gigantic fatal flaw in my entire plan: I assumed the markets would be organic. Never in my wildest dreams (or nightmares) did I imagine what would transpire over the next dozen years – – trillions and trillions and trillions and trillions more dollars poured into the financial markets, thus warping, perverting, and distorting them into an utterly unrecognizable monster.
Now, when I made the evidently naïve plan of mind, my hope was to be as obnoxious and loud-mouthed a bull as I am a bear (hard to imagine, I know, but it’s true). In fact, I sought to purchase the domain name WallOfWorry.com specifically with the plan in mine of changing domain names entirely! (For those unfamiliar, markets are famously known to CLIMB a wall of worry and slide DOWN a slope of hope, so I wanted to own the mirror image).
The point is that my bullish playbook didn’t work out in the least, and, like yourself, I wistfully look upon the time when stocks were incredibly dirt cheap (March 2009) and it was practically impossible to buy ANYTHING that didn’t go up massively in value. As I’ve said before, the ONLY “long” positions in my life that have benefited me have been various real estate properties, as well as a start-up in which invested after I sold Prophet.net back in 2005. Otherwise, common stocks have always and only been my bearish buddy (or, usually, foe).
To come back to your point, however, I honestly don’t have any bullish play book at all. In other words, in my mind I am not thinking, “OK, the S&P 500 should bottom at a price of about 1,950 by the end of 2024, and just after the election, I am going to go totally long energy stocks” or something like that. There are a few reasons I am not even bothering with such thinking:
- There are way, way, WAY too many variables in front of us to waste time making a long-term plan (hell, even last week was a bolt from the blue);
- My experience with my prior big plan completely chilled me to looking far in the future for some kind of massive inflection point;
- To be totally honest, and I’ve said this before, I believe the darkness of the future is going to be so horrible that even the likes of me will hate it; we are going to “overshoot” the badness just as incredibly as we “over-shot” the goodness in recent decades.
As an aside, I will mention that the one item that even in recent years I’ve been happy to acquire (besides real estate) is GOLD, which, as we all know, has been a total pig. I mean, honest to God, it just SITS there. But it’s obliquely comforting to know that I possess some of the stuff, just in case.
This was a very long winded way of saying the single word “No‘, but I at least wanted to respect your question enough to flesh out why I have no such plan, nor do I plan to have one in the future. We’re all making this up as we go along, my friend.
