It’s Cool to be a Bear
Thursday, August 26th, 2010
Written by Roopak Chakravarty
TopEquityNews.com
Can you feel it? That vague feeling is the cloud of doom and gloom in the air. It is everywhere you look and can be cut with a knife. I don’t recall ever hearing and reading so much negativity and calls for the market to crash as I have recently. This spells one thing: it is time to buy for long-term investors.
All of the smartest investors of all time from Warren Buffett to Benjamin Graham have advised investors to buy when there is blood in the street. If you like out the window you can see that stream of red liquid now. There are some excellent bargains to be had right now and I believe that the market is pricing in too much negativity.
You know things are feeling glum when esoteric indicators advocating the end of the world are sprouting up. Something called the Hindenburg Omen has made some headlines recently. Evidently this is an indicator that a stock market crash is imminent. It was triggered because there was recently a surge of both new highs and new lows in the stock market. This sounds like a bunch of hooey to me to be honest.
Also, Charles Nenner who owns a firm that bears his name, showed up on CNBC and said the Dow would plunge to 5000 within the next two years. He is predicting deflation and a vicious double-dip recession. At this point it seems like the bears are just trying to make sensational claims in order to make a name for themselves. This is like the internet bubble in reverse when the book “Dow 36,000″ came out and analysts would routinely slap gargantuan price targets on internet stocks. That surely was a great time to sell in retrospect.
It’s easy to get scared and sell in a panic when some talking head appears on CNBC and says the Apocalypse is coming, but nobody has made money doing that. I have a feeling that those investors who purchase strong stocks and hold for two years will do very well… unlike the Hindenberg.
