Has it really Been a Lost Decade in the Stock Market?

First off, thanks Fred for the great post that inspired the rant below .

It depends on how you look at things.

If you own mutual funds for sure. If you own most stocks for sure.

If you used Capital One for your investment dollars because you used your Capital One card to spend all your income at the mall, you are fucked, but you were not an investor and had no right investing with borrowed money. You were a gambler that thought it was your right to make money.

My 11 year track record is now pretty damn good against 99 percent of other managers because of my performance the last three years and my first three years. In between I lost about half a decade fiddling with strategies after the Nasdaq bubble crash. The key word is ‘fiddled’. When I don’t have a plan, I fiddle and learn. Luckily my partners were patient and have been rewarded again of late.

If WE are to learn one thing from the ‘Lost Decade’ of S&P, Nasdaq and Dow returns is that any idiot can make money in an up market. It is the down markets that separate the winners and losers. Averaging down (something even I have done a few times this year to painful losses) only needs to backfire once. The year 2008 is the ‘ONCE’.

It’s time to shake it off, sell your losers that are not coming back and wait. Over time, supply will shrink, the weak will go to zero and you will be left with a stock market of strong companies with great balance sheets that will be underowned. They will be underowned because 95 percent of the investing public will own reorganized airlines, banks, and auto companies. Don’t be one of them.

The returns coming will be INSANE. I just can’t tell you when so you might as well wait until the train has clearly left the station. My gut says at sometime late 2009 if we are lucky.

Unfortunately, Pelosi, Paulson, Barney ‘I can’t believe they don’t use a fake FBI transmitter Voice so we don’t all puke when he talks’ Frank will be doing everything in their power to save the poorest and weakest of the weak. It will be costly in both time and money and VERY distracting so just stay away from that noise.

Whatever brokers survived the Nasdaq bubble, are surely finished now. The remaining ones missed the ‘we are dead’ memo back in 1999 and are so tainted you should not be calling them. The great ones left when E-Trade and Schwab gained dominance in the late 90’s as they saw the Tsunami coming. They don’t want to manage your money unless it’s in a hedge fund that they can leverage 10-1 and shut down if they are wrong.

The ‘Lost Decade’ will spawn many great winners in the decades to come, and the smallest investor has the biggest chance to reap the rewards from a more level playing field of transparency, reduced supply, stronger companies. Don’t be cynical at exactly the wrong time.

WE lost this decade. The stock market has surely been overtaken by a carnival act of thieves and ninkompoops, but it is all of us that contributed to the tsunami of demise this year.

It’s time to build the business of your dreams and quit hoping for anything else.

In the meantime, you could sign up for Twitter and StockTwits and talk to SHAQ . He may not reply, but that has not stopped The Fly and I from talking to him:

Shaq to world: I get my neck cracked b4 everygame, today i felt a xtra clikadee clak

Fly to Shaq: After the market closes, I get my neck cracked too. We have a lot in common.

My bet is that SHAQ won’t be able to resist becoming my friend. I am clearly in a race with my frind The Fly for Shaq’s follow and The Fly has an early lead.

The Web is in inning two or three at the latest!


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