Because it’s TWELVE-THOUSAND!!!
You know, most people who trade equities or options actively, eventually become Bears — at least sentimentally. There’s lots of reasons for that, but primarily, it’s because markets, when they go down, go down faster and harder than they go up (They take the stairs up, and the elevator — or window — down.). Jesse Livermore, regarded by some to be the greatest stock trader of all time, shorted the market in 1929 and made a $100 million. Adjust that for inflation. it was 1929. Jesse was great because he was the greatest Bear.
But you don’t even need a crash. Corrections of up to 5-10% take a matter of days, while the climb back up can take weeks and months. And if you’re used to the idea of doing best in bear or crashing markets, then crashes don’t scare you. You secretly long for them. Bull markets are effing boring.
The other reason is that Bulls are either making money on the transactions (brokers), or they’re suckers, morons, or ignoramuses when it comes to understanding what’s really going on. At least that’s how the Bears see them. Do they make money? Sure. Buy and hold, and make 10% long term, if you’re lucky. Of course, if you began doing that in 1928, you’d have broken even by about 1950.
There are some smart people who make great returns going long. Warren Buffet, of course, …but then, he doesn’t buy because some CNBC talking-head moron gives the latest 99th "buy signal" to the one token sell they might issue. Buffet and guys like him make their money by scouring for well-run companies that produce objective value and have stock that’s trading at a bargain in comparison to company value and earnings.
The Dow. What a laugh. Do you know how many professional traders even have a chart of the Dow up during the trading day? Zero. In fact, on one of the trading platforms I use, the Dow index isn’t even in the default ticker list. You’ve got to ad it. Thirty stocks. Out of about 12,000. New high. Well, they aren’t even the same companies as they were at the 2000 high, dummy. You didn’t know that, didja? How many morons know that? 12,000. Why? Well, because it’s TWELVE THOUSAND! I guarantee you that there’s not one retail investor (notice I didn’t say "trader") out of 1,000 that has the remotest idea what that number means, how it’s arrived at, or what it really is if you adjust for inflation.
So, the Dow is all the rage. Twelve Thousand. And, granted; if you generally invested in stocks around last August or September, you’ve got more money than you had. I’ll give ya that. You know what? I like to see people make money — and even if they do it blindly by investing in things they don’t understand just because someone with a vested interest says so. Fine. But guess what else? I love justice even more, which is why I’ll savor the delicacy when those who simply buy because, well, it’s TWELVE THOUSAND, take a really big hit to their portfolios at the eventual day of reckoning. Getting smacked for one’s ignorance — though tough, and I always hate being on the receiving end — always ought to be a welcome thing.
Besides, the general stock market is really only one thing. It’s a market whereby money is transfered from the hands of the ignorant masses into the hands of the intelligent few. This process is accomplished by causing the greatest amount of pain to the greatest number.
Which group do you want to be in?
Now, Bears: get with it already. Haul this sucker down. Down big. Way down.