Last week and Our Last Two Posts

Last week left us with little of import. Stocks were down a couple tenths of a percent. Bonds yields were up on the short end, mostly down on the long, continuing the deepening of an inverted yield curve. Gold/Precious Metals were up a couple of tenths of a percent, with hints that the lackadaisical PMs may finally wake up - but only hints so far.

Big deal. So with basically nothing last week to give us a hint at what might unfold next week, let's see if we can stretch out what we posted in Week 1 of 2023 and Week 2 of 2023.

So the last two posts considered at:

• what we might expect in 2023
• whether the last 4 years were crazier than the Dot.com Bubble

And what was the point of that? 

Well, for 2023 we might have an extension of the Bear Market in stocks, maybe even bonds, or...we might switcheroo to the next Bull Market. It's certainly a sort-of reasonable speculation based on most of the past history of Bulls and Bears.

As for the possibly crazier last 4 years vs. the Dot.com Bubble, if that's the case then we might speculate that the next _____(fill in the blank) number of years we get a relentless, potentially nasty decline in stock prices.

The simple point: History gives us a hint of what might occur the future, but it's not a sure thing by any means.

And what good is that? Nothing really, except for this question we posed two posts ago:

What if the Big Bull Trend that began in the early 1980s has ended and we're in a totally new world, one that the vast majority of investors and the investment professionals that advise them and/or manage their money have never experienced? 

Frankly, that's got more heft than all the "speculate' stuff. So let's dwell on this for a bit.

"Dwell"? It's not something most of us like to do. We search the internet of "information" and think that this-that-and-the other thing will yield some grain of, well, something. But is that how things really work?

No.

Throwing this-that-and-the other thing into a pot can yield a tasty dinner - if you know what you're doing. I know what I'm talking about. I really enjoy cooking. But more so, I enjoy opening the fridge and perusing the leftovers therein. 

(We don't throw food out. First, and foremost, there are too many people who lack sufficient food. Some are actually starving; some don't get sufficiently diversified calories that provide the sort of nutrition that supports or advances overall physical and mental health. So unless we can give our leftovers to such folks - typically impossible - we make sure we don't waste such leftovers. At the very least, we use those calories in a responsible manner. And that would be to keep us hale and hearty. Only be being such can we possibly help others who have less than we have.)

Deep breath.

Oh, right, we were talking about financial stuff, not food. OK. 

So by "dwell" we're talking "think." And real thinking requires some degree of dwelling, doesn't it? Sure does. Thinking isn't stuff that flies through your brain that you spit out. That's mostly superficial stuff that's frequently inconsequential even as it makes you look like you've got a really cool, quick brain. 

Cool and quick doesn't result in much of any import. It just adds to the noise that surrounds us all the time, and there's already too much of that.

So now let's dwell, er, think deeply, about the possible end of that aging (dead?) Bull that started around 1980-82. 

First, this requires us to see that there was this long and BIG trend of around 40 years. Sure, there were bulls and bears throughout. And these were pretty powerful. So we've got to consider this but step back look at the bigger picture.

If this Big Trend is over, that means, perhaps (and maybe logically) another Big Trend has begun. Does it also mean that Big Trend will be a Bear.

What? A 40-year Bear Market?!!

It kind of does. But before we all sell off all our stocks, and never buy another one for the net 40 years, consider this; There have been periods of decades where stocks - at the end of the period - did not provide a positive return. But folks could have made money nonetheless. 

One quick, simple example. After the great crash of 1929 it wasn't until the 1950s that the Dow fully recovered. It wasn't 40 years, but it was more than 20. But had you bought blue chips that paid steady and increasing dividends, you could have seen consistent income of 6% +. Not bad. 

Could we see similar opportunities appear if we're going into a Big Bear this go-round. Who knows? If so, it might make sense to grab some of these for our portfolios. Maybe.

But one thing we might conclude for sure: It's questionable whether the "buy-and-hold" and/or 60/40 portfolio thing will hold up as it did during the last 40 years. Indeed, the buy-and-hold mantra arose during this Big Bull. It wasn't always chanted by investors. So it's not necessarily the permanent fixture of investing that Wall Street has been hammering into our brains for decades. 

Just see what happens if we get a nasty Bear assert itself in the coming months, maybe years. Neither buying nor holding will sound so sweet.