The New York Times is full of stories of lost fortunes. They wrote, “if general insolvency is ahead of us, existing prices cannot be too low…they ought to be even lower.”
Times added, “Indicators of the U.S. economy flashed some of their gloomiest ever…depression in the housing industry…doubt among investors about the Administration’s ability to control the economy has sent the stock market in to a frightening slump…and the high cost of borrowing and the impossibility of selling new stock issues in a collapsing market make it difficult for companies to raise the money needed to expand or in some cases even to stay alive, thus intensifying the threat of recession, or worse.”
The quote from the New York Times is from 1932, just weeks before the Great Depression bear market ended. The quotes from Time Magazine are from the fall of 1974, just days before the bear market bottom was reached. So, don’t count on the media to tell you when things are improving.
The stock market had an exceptionally strong second quarter and is due for a rest or a retracement. As it gives back some of its gains, the media will be especially gloomy with talk about markets hitting new lows. All of this is normal activity.
David Vomund
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