Galloping Nowhere

May 27, 2014 1:01:00 PM

Be fearful when others are greedy and greedy when others are fearful. - Warren BuffettIWC

This past week has been another great week for long-term investors as the abundance of the investing experts have once again come out predicting a 20% correction in the stock market at any time now.

The pessimism towards investing in the stock market this week and for that matter, the last several years, has been outstanding.

To those who have been predicting and continually claiming we are going to have that big correction any time now, I want to personally thank you! I mean, these predictions have been going on for a long time now! This of course, has in my opinion, kept equity valuations from getting way out of control (like 1999).

So, thank you, predictors of a correction!

How long? Well, for approximately the last three years with the negativity really swelling in the last 5-6 months. I mean, after all, how can a stock market and stock prices just keep rising? That is just too irrational! Think about the poor folks who were negative on the stock market 2-3 years ago.

Frankly, I have been telling our clients that the pessimism in the stock market and fear that has been front and center, has led us to a tremendous opportunity to continually invest in the companies we want to own long-term without valuations getting too out of control. Thank you again for that opportunity!

Of course, as the U.S. stock market continues to move around all time highs, I cannot tell you enough how excited I am to see the continual fear and jawboning going on regarding the stock market.

Me, I'm not a big fan of predictions. In fact, I believe many investors have an addiction to predictions as it pertains to the stock market and individual stocks. My guess is that that has kept many investors from investing in equities.

Fear and greed, they always sell.

So, just how fearful are investors today?

Recently, I read about a Gallup survey which stated that today only 52% of investors are invested in the stock market.

Is 52% good? Bad? Well, according to Gallup, that is the lowest percentage in 20 years!

Unfortunately for the people waiting for the right time to invest, or for the investors that don't like the stock market anymore because they can't trust it, they have missed out on investing in some great companies for the long-term.

  • Why is it that investors continue to be addicted to predictions?
  • Why is it that the amount of people investing in the stock market is at the lowest level in 20 years?
  • Why is it that so many investors are stuck on the beach and don't rust the stock market?
  • Why is it that many investors continue to listen to predictions? I mean, after all, do you really keep track of those predictions to see if they were correct?

The answer? CLARITY!

I believe if investors had more Clarity regarding their investments, they wouldn't care about stock market predictions or trying to time the stock market.

Additionally, I believe if investors had more investment Clarity, they wouldn't worry so much about stock market volatility, or more importantly, volatility in an individual stock's price and wouldn't be so down on investing in equities in the first place.

So, in closing, let me just say; Even though I think it is really too bad that investors continue to be pessimistic and fearful of investing, I want to personally thank you for your attitude as it continually allows us to invest in great companies at lower prices.

After all, for our clients and me, we are Investing With Clarity!




Mark Pearson

Mark Pearson

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