My nightmare scenario would be 2008 redux, an apocalyptic financial crash, coupled with a Fed that has run out of bullets and body-politic, too crippled with infighting (or stupidity) to act on fiscal stimulus to right the economy. Though I do not believe the conditions are right for this type of event, there are many investors fearful that a 2008/ Black Swan event may be right around the corner… investors from Baby-boomers to Millennial’s who were imprinted by the events of 2008 and 2009.
“In psychology and ethology, imprinting is any kind of phase-sensitive learning (learning occurring at a particular age or a particular life stage) that is rapid and apparently independent of the consequences of behavior. It was first used to describe situations in which an animal or person learns the characteristics of some stimulus, which is therefore said to be “imprinted” onto the subject. Imprinting is hypothesized to have a critical period.”
In animals, it is the duckling imprinting its mother as a hatching and following her dutifully in every move that she makes. With humans in the stock market, it might be the monetary and psychic pain suffered in the ’08 collapse. ‘Once burned, twice shy.’ We never want to feel that bad again. So, we shun the market and stocks. I might point out that this is where the Great Depression generation was after 1929. It was where my parents’ generation was after being savaged by the markets of the 1970s. And it is where many in my generation are after 2008…the former two instances represented terrific long-term opportunities to own stock. In every generation there was the assumption the next disaster was right around the corner. They were always disappointed, as those disasters take time, maybe generations to brew up.
I WANT TO REINFORCE THIS POINT! It is critical to everything that I have written about over the past, nearly three years. It should be part of your investment calculus. I would urge you-implore you to watch the attached video (link below). The discussion featuring legendary value investor William Miller, LLM chairman & CIO and Brian Rogers, T. Rowe Price, chairman & CIO, who bring the long-view and perspective to the craziness we’ve become so accustomed to from media. Their learned view is that this is not the worst case scenario. It is the “Best case scenario for the market.” PLEASE WATCH.
Let me know what you think.
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