Happy days are here again. Perhaps forever! I have seen the light. I have seen the error of my ways. At long last, I understand. This stock market is a great investment. Stocks are just going to keep going up and up and up and up. Anyone who doesn’t buy now is a fool. I have learned to love the bull market. [Yeah, sure!].
The above introductory facetious comments are edited excerpts from an article* by Brett Arends (marketwatch.com) entitled 30 reasons not to worry about a stock market crash.
Arends goes on to say in further tongue-in-cheek comments:
Why? Here’s why:
1. Stocks have been a terrific investment in the past. Therefore, they are a terrific investment now.
2. Yes, stocks look expensive compared with annual sales, net asset values, gross domestic product, the replacement cost of company assets, and the average earnings of the past 10 years – but none of that matters because valuation measures are completely irrelevant.
3. Even if valuations were relevant, well, those old-fashioned metrics don’t matter much anymore anyhow. That’s because people used them back in Olden Times, when stockbrokers wore mutton-chop whiskers and cycled to work on penny-farthings. Today we have cars, airplanes, even Facebook! Ergo, it is no longer relevant to compare stock prices to, say, net asset values.
4. The true value of the stock market is 1.2 x P, where P is the current price of the stock market.
5. You bears “just don’t get it.”
6. Stocks were cheap five years ago. Therefore they are cheap now.
7. The S&P 500 is almost three times as high today as it was in 2009. Therefore it must be three times as good a deal!
8. Companies aren’t wasting their money paying out lots of dividends to investors. Back in the past, an investor who bought $100 worth of stock got back, on average, about $5 in dividends in the first year alone. Today that figure is less than $2. That doesn’t mean you’re going to earn three percentage points less! Oh no! It means your growth is going to be even better!
9. Never bet against America. We’re number one, and anything that’s good for America is good for the stock market.
10. Inflation is low and that’s great for stocks. Like it was in, say, 1929, when inflation actually turned negative – and like it was a decade ago.
11. People who aren’t bullish are losers and sissies.
12. Unemployment is falling. Low unemployment is great for stocks, as it was in, say, 1929 and 1999. On the other hand, high unemployment is terrible for stocks. That’s why it was such a bad idea to buy stocks in 1932, 1982 and 2009.
13. Stocks will earn 10% a year in the future, because they have in the past.
14. Why are skeptics so negative? Why do they hate freedom?
15. The economy is so productive, thanks to the Interwebs, Facebook, Twitter, iPhones and so forth, and that’s great for stocks. Why, so far this millennium the U.S. economy has grown at an average rate of 2% a year plus inflation. Last century, from 1929 to 1999, it only managed…er…4% a year plus inflation.
16. U.S.A.! U.S.A.! U.S.A.!
17. Everybody on Wall Street says this is a great time to buy stocks, and if they don’t know, who does?
18. Consumer confidence is getting better, just as it was in the late 1990s. That has to be good for stocks!
19. The economy is picking up, but that’s not going to lead to higher costs or rising interest rates.
20. Mom and Pop are back in the stock market, and millions of ordinary investors can’t be wrong.
21. People are starting to swap stock tips again. That has to be good news, too!
22. We’re Number One!
23. Stocks have never been a bad investment for more than a few years.
24. Yes, stocks have been a bad investment for most of the past 20 years, but that just means they’re “due.”
25. Yes, stocks were a disaster in the 1930s and in the 1970s, but that can’t happen again, because back then they didn’t have iPhones.
26. The iPhone 6 is about to come out.
27. “Oh, say, can you seeeee…”
28. Bond yields are really low. That means stocks are a good deal. But it doesn’t mean the economy is going to get worse.
29. If stock prices over the past 40 years have gone from an average of 8 times earnings to 16 times earnings, then over the next 40 years they can go from 16 times earnings to 32 times.
30. People who know nothing whatsoever about stocks are starting to hand out stock tips again—and if that isn’t good news, I don’t know what is.
Yes, indeed, I have learned to love Bull Brother.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://www.marketwatch.com/story/exclusive-there-will-not-be-a-stock-market-crash-2014-08-12 (Copyright ©2014 MarketWatch, Inc. All rights reserved.)
[Given the nature of the above article which may, surprisingly, be misconstrued by some it is important to note and emphasize that all the information and] “Data is provided “as is” for informational purposes only and is not intended for trading purposes. SIX Financial Information (a) does not make any express or implied warranties of any kind regarding the data, including, without limitation, any warranty of merchantability or fitness for a particular purpose or use; and (b) shall not be liable for any errors, incompleteness, interruption or delay, action taken in reliance on any data, or for any damages resulting therefrom. Data may be intentionally delayed pursuant to supplier requirements.”
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