American Consequences - March 2021


And we want to be on board for as much of it as possible... no matter how stupid it gets. I showed you what happened the last two times the markets looked like this. I wasn’t an investor through the 1983 boom – I was 11 years old then. But I lived through the boom that peaked in March 2000. It was a crazy time... and the “stupid” gains were piling up. In January 2000, I issued the most serious warning of my career to my 40,000 subscribers. I wrote... We are at the peak of most likely the greatest financial mania that will ever be seen in our lifetimes, and possibly the greatest ever witnessed... As long as the mania continues, we’ll continue to hold and even buy the best participating companies... How can we buy stocks when we know it’s reached the mania stage? It’s easy, we have a disciplined system of investing that’s been proven to make money.

In short, we had an exit strategy – just like we will 21 years later. Here’s how it went down back then... The market peaked in March 2000. Our exit strategy signaled for us to get out of most of our positions in April 2000. At the time, selling our positions because they hit their trailing stops felt like I was failing my readers. Times seemed so good. It felt so wrong to sell! But in the end, it was by far the right thing to do. I had no idea that the market would keep going down, and down, and down... eventually bottoming – years later – in 2003. You never know just how high a boom can go on. As the saying goes, “Markets can remain irrational longer than you can remain solvent.” That goes for booms, too.



March 2021

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