A Permabear Strikes Back

All right. I’ll respond to you the way I always do when you send me a reprise of the doubt you voiced today. I will do it not for your benefit, because I believe you to be permanently lost to headlines and invalidated pundits, but for the benefit of other investors who visit my site to find a better, more profitable and less stressful approach to stock-market profits.

Here goes:

How do you know the market is in postponement mode? Permabears have said so for years, while investors committed to a system of price reaction have profited greatly.

The Fed was supposedly out of ammunition after dot com and again after subprime, yet here we are, much higher in price with a Fed looking and sounding confident. Who’s to say they don’t have five or ten more rounds of stimulus in them?

The dollar is nowhere close to losing its reserve currency status–another decades-old permabear canard. The SDR basket of currencies never caught on, and nobody can name a single sovereign currency ready to take over. There is no alternative to the dollar, therefore the dollar will not lose its status in the near term.

National debt and global debt–other permabear favorites that have not mattered yet in the 35+ years we’ve heard they would create a catastrophe.

You are told these things matter, and you believe they should matter, but so far they have not mattered. “But just you wait,” you might think, and have written to me in so many words. Fine, except that investors have awaited accurate permabear forecasts for decades. An investing lifetime comprises only about three decades, so thanks to permabear warnings, some investors have missed out on a lifetime of stock profit.

As for a retiree’s use of my system, they enter a reduced allocation as they approach and then enter retirement. A bear market would cause a drawdown in their stock allocation, but deep into retirement their base allocation to stocks is only 20%. They would have plenty of buying power to pounce on the low prices and benefit from the ensuing recovery–and a system that guides them to do so, which is more useful than pundits advising them to hide because of, oh, I don’t know: the market being in postponement, the Fed being out of bullets, the dollar losing its reserve currency status, and national debt, perhaps?

View single page >> |

You can learn more about the way I use leveraged ETFs in The Kelly Letter at jasonkelly.com

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.