Monday, 8 October 2012

It's stockmarket silly season

Let's get straight to it. Here are the facts:

  1. The stockmarket crash of 1929 took place in October;
  2. 1987's 'Black Monday' crash took place in October;
  3. The financial crisis of 2008, specifically October, recorded the worst ever volatility and 5 of the 10 worst point-drops in the Dow's 100 years of history...
These are NOT the facts; just interpretations* of data:
  1. 'Cyclical P/Es, using 10-year earnings as the divisor, suggest the S&P is currently somewhere between 30 & 50% over-priced..' (Doug Short)
  2. 'Expect markets to drop 90%; starting now.. '(Robert Wiedemer). For those of you who don't know, Wiedemer predicted the 2008 crash.
  3. 'Greatest debt bubble in history..' (Harry Dent) - 'markets could fall as much as 60% in the next few months..'
With respect to these authors these few examples (of many) have been written and re-written; rehashed and remixed and interpreted in some cases, as many would argue, as a means to an end. There's nothing new here. It's the same each year. You might even call it 'cyclical negativity' or even 'Red October' (with apologies).. Even as I write this I can't help but feel a little bemused by my own interpretation of these interpretations. I can, however, predict with some confidence, that somewhere between now and the future, the markets will crash and somebody, perhaps even one from the few I've mentioned here, will have predicted the crash; accurately. Play red long enough; have enough capital and you'll be a winner, at least once and that too is a fact.