12/21/09 Paris, France – “A nightmare decade for stocks,” says a headline in The Wall Street Journal.
“Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade.”
The 1990s was the best calendar decade in history for stocks, with an annual gain on average of 17.5%. This decade, by contrast, was the worst calendar decade for stocks going all the way back to the 1820s…
Which gives us a sense of triumph…you know, that’s the thing that comes before a fall. Ten years ago, we warned readers that the US stock market was going into a bear market that would be like the Japanese market following the stock crash in Tokyo in ’89. It would be “long, soft and slow” we said.
Then, the market rebounded. Investors thought the promises of the ’90s – “stocks for the long run” or even “Dow 36,000” – were still good. As for The Daily Reckoning, it was obvious that we didn’t know what we were talking about, because the Dow just kept going up…first above the high set in 1999…and then all the way to over 14,000. Even we had to admit… If this was a bear market, it was a very strange one!
Ten years later, the decade of the ’00s has proven to be the worst ever. Yes, dear reader, the ’00s were the worst for investors ever, even worse than the 1930s.
Now, we are wondering: what’s next for the stock market? More of the same. The bear market that began in January ’00 still has not fully expressed itself. Stocks have not been beaten down to bargain levels – where they sell at 5 to 8 times earnings. Investors have not given up. There is no widespread sense of disgust and disillusionment with the stock market.
And it still takes about 10 ounces of gold to buy the Dow stocks. At the bottom, you’ll be able to buy the Dow for just 1 or 2 ounces. And then…you’ll think twice. Because everyone around you will be telling you that stocks are ‘finished.’
And who knows? Maybe they’ll be right…
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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I come here to read your posts just because I can’t believe there are still people out there like you that are looking for the market to fall. It fell. It crashed. It rebounded.
The economy is getting stronger with each economic report. Yet, here you sit, day in and day out talking about the market as if we haven’t seen the worst. Well, I got news for you. Nothing out there indicates this market is moving lower now. Even the higher dollar can’t take it down.
So relax. Buy some stocks and by the end of the next decade you could very well see 20% returns.
And something that returns 20% during hyperinflation will make you poor so fast your head will spin. Good luck with that Harry.
Bill, I don’t know about where you live, but all I see is good times around me… full employment, opportunities, optimism among our youth. Ahh….. it’s a great year to be alive. I love 1998.
Oh wait, it’s 2009 and things are dismal.
People cannot find jobs, cannot unload their houses, cannot keep up with taxes, cannot keep up with tuition and, having been in Japan, north to south in the past 5 years I can say the US is starting to get a similar feel, except without the great public transport or weight gain.
And what CC said: Good luck with that.
Harry is really stupid enough to believe what he divines in his fecal leavings.
He just can’t get it (down their in his mother’s basement) that 1) he is poor 2) the stock market is inflated with funny money FRN’s and based on NOTHING real.
What part of “worst decade in history for stocks” doesn’t this sell-sider (who’s still too stupid to sell) understand.
Everyone I know that was laid off this year is back to work.
I can sell my house today for more than I bought it in 12/06.
Every young person, with half a brain and not a pathetic whining doomer, is extremely optimistic.
So yes, we do live in good times ahead.
Regarding returning 20% in “hyperinflation” (yes, you guys have been saying that for years), isn’t 20% better than nothing? That the stupidity of the doomers. They’d rather sit and make no money, even though they believe inflation will suck them dry, than to make money. Unbelievable.
So good luck with the bomb shelters. LOL!
Now, we 9.8mh devils are wondering
my SLSG launch point very very too soon !
Live long and prosper,all!!! Have a nice dai… *S*
Harry I would redirect you to the shadowstats website. Look at the data and the statistics (WHY AND HOW the statistics are calculated) and if you are still convinced we are having a full recovery, well you’re an idiot.
So everyone Harry knows that was laid off this year is back to work. Both of them.
After he bores his wife (or mother) to death with his ramblings about how prosperity is just around the corner, he feels the needs to come over here and bore us to death as well.
He also thinks he has a direct line to BB. Wow.
Harry, if you can sell your mother’s house for more than you could in 12/06, walk the walk. Try it. Try it next month. Put all the money in stocks. You say the Dow will hit 14,000 in 2010. Don’t be a pathetic whining doomer, be rich!
The Democrats want to retain their seats and they have every reason to prop the economy up until the elections are over next year. Right?