irrational exuberance

market vibes

July 10…)  

If I had a nickel for every time I have read or heard the word bubble recently, I wouldn’t be writing commentary on Substack, I’d lounging on my Riva off the coast of St. Tropez. So, I thought I’d share some thoughts on bubbles because they are like earthquakes. We have them everywhere every day, it’s just the big ones that count.   

These are great forces of nature that have been written about for centuries that change the very self-image of humanity for decades until they come again. But humanity evolves and just like every other threatening force of nature, financial risk is presently on a par with mass migration and nuclear war. Famine and pestilence seem to have been settled.   

In my cogent life the 1st crash I lived through was in 1969. My family was in finance and stocks have always been a topic at the dinner table. Then came the Nixon bear market in 1974 that lasted 11 years. I was in high school and then college. I went to work as a runner on Wall Street in 1976.  

I saw Edson Gould (he must have been in his 90s) on Wall St Week in the late 70s saying the next bull will eclipse all previous bull markets … ever. He was right. Volcker crushed inflation in 1980, Reagan won the presidency and like Trump deregulated everything he could.

In August 1982, stocks exploded higher. At the time I thought that was the bull market Gould was calling. But over the course of a lifetime, I have come to think we have been in the same bull market for stocks and bonds that started in August 1982.