If you've taken Econ 101, you know that the quantity of money rises only when the banking system makes a net loan.
I can find only one bull market, in 1935, that didn't have some material indigestion within its first 12 months.
The upward move at the beginning of a bull market is almost always huge compared with the vacillations late in the bear market. If you try to pick a bottom, you will miss a good part of the action.
Anyone can see how if a feared tax hike doesn't happen, that's a positive factor. But even if tax hikes happen as feared, vast history tells me it doesn't have to have the big bad impact folks fear. And fear of a false factor is always bullish.
Buying only what you know can end in disaster. Just think about Enron's employees and business partners, the 'locals' who bought lots of its stock because they thought they were in the know.
Environmentalists should like fracking for its relative cleanliness. But they don't. They have made a bugaboo out of the chemicals in fracking fluids, which supposedly can leach into groundwater sources. I'm convinced they're dead wrong. Ultimately, good technology with a cost advantage will win out over paranoia.
The bubble, as investing phenomenon, has been well studied ever since the 17th-century tulip bulb frenzy. Its counterpart in bear markets is not well understood.
Investors covet past improvements but also always believe pricing unimaginable future creativity and efficiency gains is Pollyannaish. And they're always wrong. Bet on it.
Most investors give too much credence to the theory that prices are rational; they presume that a market collapse must have been justified by serious economic trouble.
When I was a young man in the 1970s, tech firms were scattered across the developed world. Since then, America has come to dominate tech almost totally.
All equity categories, correctly calculated, create near-identical lifelong returns. They just get there via wildly differing paths.
If you can predict where the market's going, just do what you can predict. If you can't, which is the presumption of dollar cost averaging or time cost averaging, either one, then you're trying to ease in. But if the market rises more than it falls most of the time, easing in is, by definition, a loser's game.
I never liked quantitative easing. It's misunderstood by almost everybody. Flattening the yield curve is not stimulative; flattening the yield curve is anti-stimulative.
Long before folks fretted the demise of 'quantitative easing,' I fretted its existence. It proved the reverse of its image, an antistimulus, and we've done okay not because of it, but despite it.
Despite its many critics, hydraulic fracturing will change the nature of energy production.
My father, Philip Fisher, was the toughest guy I ever knew. An example: He had terrible teeth, yet he got his fillings done without ever using a painkiller. Now, that's tough!
Normally, if you have a huge category that leads a bear market all the way down to the bottom - like tech after 2000, or energy in the '80-'82 bear market - you get one quick pop, and then years of lag as we fight the old war.
People do dollar cost averaging because they have regret of making one big mistake. But the fact of the matter is that, mathematically, the market rises more of the time than it falls. It falls, but it rises more of the time than it falls.
The average mutual fund holding period for equity or fixed income is only about three years. It's too short.
I'm sometimes accused of being hostile to mutual funds. That's not fair, really. There is a place for them. Still, I am hostile to one thing, which is trying to use funds to time your way in and out of the market. That's a recipe for very bad results.
