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Mix-Ansicht- Der nächste KRÄSCH wird heftig - Das_Orakel_aus_Oberlahnstein, 22.10.2003, 13:53
Der nächste KRÄSCH wird heftig
-->Lessons Learned and Unlearned
October 20, 2003
The lessons learned in the stock market debacle of 2000-2002 could actually result in the next decline being even greater and more violent than the recent experience. Many of us have wondered how investors could so quickly forget the lesson of the massive bubble and subsequent decline that caused investors so much money and anguish. It turns out, however, that <font color=blue>most investors are not sorry that they participated in the bubble, but that they got out too late or not at all.</font> The promoters of the late 1990s bubble preached the idea that the economic and market outlook was so outstanding that investors should stay in for the long-term and not try to time. The majority of investors wholeheartedly believed this idea and suffered severe losses. Looking back at the experience, many investors ran up huge profits only to see them disappear or even eat deeply into original capital. They now apparently feel that getting into the bubble was a good idea, and that the only mistake they made was not getting out in time.
If we are correct in our thinking, the implications for the market are extremely dire. It means that investors in the new ongoing bubble are far more risk averse than they were in the late 1990s and are no longer willing to hold through thick and thin. Even after the decline started in early 2000, investors refused to believe that the market could go down substantially, and consistently bragged during interviews that they would not be scared out. This, in turn, was a carryover from the previous lesson learned in 1987—that the market always comes back quickly. Today we seldom hear investors say they are in for the long-term. In our view, investors are ready to bail out quickly at any sign that the market begins to fall, or on any disappointment in the economy. This means that on any downturn the market would unravel much more quickly than in 2000-2002 and that there are likely to be numerous days of panic selling. We have always believed that investors never capitulated during the downturn, and that the bear market will not end until that happens.
There are a number of factors that can trigger a market decline soon. First, the market remains extremely overvalued. Second, stocks have already discounted a strong recovery and are not acting that well in view of the improved economic numbers. Third, a lot of the economic stimulus has already been used with fewer stimuli available in the near future. In particular, cash outs from mortgage refinancing (REFIS) were $280 billion in 2002 and up to an annualized rate of $450 billion in the second quarter of this year. However, REFIS have dropped dramatically over the past few months, and are now being reflected in reduced money growth. <font color=red>In the last three months the annualized rate of growth in M2 has declined from 12.5% to 1.9%, while the rate for MZM has dropped from 15.8% to 3%.</font> In sum, we believe the market is vulnerable to an extreme downturn, and that it could happen sooner than most believe.
<ul> ~ Hier steht's</ul>
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