Keep a diary of these days! March 6, 2009

Keep a diary of these days! March 6, 2009

Ten years ago, wrote a column with a similar title, saying: "Someday your grandchildren will be thrilled by a future bull market, and you'll certainly want to talk about the great bull market of the 1990s. But you need the big test, or do not believe you. So keep a diary, about how the frenzy of savage's own technology and Internet stocks at any price, how IPOs of the unknown fires bursts of up to 200% in one week, America Online, still trying to make a profit, is valued at more than the combined value of Delta Airlines, Federal Express, Texaco, Raytheon, Litton Industries, Colgate Palmolive, Union Carbide, Pepsico, Hertz Corp., JC Penney and Sears. And be sure to include news this week that the brokerage firm Donaldson, Lufkin and Jenrette has opened kiosks negotiation "to the middle of several ski slopes in Vail, Colorado, so skiers can leave their way down to check their stocks, making operations and continue down the slope.

As I said at the time, if that's not a fad and a bubble, then the definition of these terms no doubt would have to be re-written.

Soon after we saw the severe 2000-2002 bear market, in which the S & P 500 lost 50% of its value and the Nasdaq, home Most of the technology and Internet stocks lost 76% of its value.

We then saw the bull market of 2002-2007 that led The Dow and S & P 500 all the way to their highest in early 2000 (but not the Nasdaq, which recovered less than half of the losses).

Then we saw the bursting of another bubble, this time in housing, and the current bear market even worse in the stock, which has reduced the market values below their minimum of the 2000-2002 bear market, in fact return to their 1997 levels.

Yes, it was the historical period.

Someday, like our grandparents and great grandparents talked about the great crisis of 1929-32, we will be telling our grandchildren stories of 2008 and 2009. And again, you may need a test if you have to believe. Thus that, once again I say keep a diary of these times.

Otherwise you can not believe, for example, that in 2009 a quota of one of the largest banking conglomerates the world, Citigroup, you can buy for $ 1, less than what they charge for the withdrawal of one of their ATMs, a hundred shares for a hundred dollars, or a part GE, which just two years before being honored as the best run company in the world could be had for the price of a Big-Mac. Or that the shares of General Motors once powerful, which for generations was said that "what goes General Motors so goes the nation" could be had for less than a cup of coffee, but nobody wanted that since the company said it was likely headed for bankruptcy. (Hopefully the old saying goes that as GM so goes the nation no longer has any truth in this, since for generations when GM was making good of the nation was doing well, and when GM struggled, too did the nation. GM heading for bankruptcy?).

Meanwhile, you also want to tell your grandchildren how, as has often happened in the past 100 years, again in 2008 and 2009 the banks and brokerage firms were being investigated by Congress and regulators, trying to how greed and the assumption risk once again out of control, how their problems again threatened the collapse of entire financial system and economy, how many were buried before completion, of how the market crash had criminal Ponzi scheme again out of wood, while economic conditions were downright frightening.

When we say that history, our grandchildren may ask what the difference between the risk of making banks and risk-taking speculators the Internet bubble or the housing bubble. Let's say that one of the biggest differences was that, as usual, the banks and Wall Street firms risked and lost the money of others.

Yes, we are living in historic times to be analyzed and commented upon by generations to come.

Let's leave it, at this point, probably sooner than later (with 12 years of past excesses and taken off the stock market).

But the way in which will perform the story is still unknown and unwritten.

Sy Smith publishes the financial website target = "_blank" title = "www.streetsmartreport.com"> www.StreetSmartReport.com and a free daily Internet blog at target = "_blank" title = "www.syhardingblog.com"> www.SyHardingblog.com. In 1999 he authored Riding The Bear – How to prosper in the Coming Bear Market. His new book Beat the market, the easy! – Proven Seasonal Strategies Double Market's Performance!

About the Author

Sy Harding is CEO of Asset Management Research Corp., author of 1999′s Riding the Bear and 2007′s Beat the Market the Easy Way, editor of www.StreetSmartReport.com, and www.SyHardingblog.com.

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