Sunday, May 5, 2013

Stock Market Quotes

We've Seen This Film Before

Just to be annoying, because everyone knows that this stock market can never stay down as long as the Fed is throwing money into it, I have assembled some quotes from the past. They will seem odd and cranky now, since they are a bit darker than things you would expect to see during such a wonderful stock market world where everything is bright and new and the sun is shining and the scent of jasmine is in the air. Who knows, though, perhaps they will seem a little more pertinent in a year or two - maybe sooner. I'm just having a little fun with this, so kindly don't read any market predictions into it.

(My other passion in life, beside trading, is film, so I will throw in an occasional odd movie quote here and there. If you don't recognize them, no matter, the rest of the narrative should work anyway.)

The logic of "the market must go up because of endless Fed liquidity" is absolutely inescapable. It's an airtight case. Absolutely infallible. As long as HRH Ben Bernanke, who holds the fate of the entire financial world in his hands, is in charge, we have no worries. "Major Eaton: We have top men working on it now. Indiana: Who? Major Eaton: Top... men."

Below are my reactions to some quotes, followed by the quotes in question. Think of it kind of like Carson's old routine with the "visitor from the East," where he gives the answers, then Ed reads the questions.

Nah, Jeffrey, this new thing called "The Internet" is going to make all that "bubble" talk obsolete:

We had a booming stock market in 1929 and then went into the world's greatest depression. We have a booming stock market in 1999. Will the bubble somehow burst, and then we enter depression? Well, some things are not different.
Jeffrey Sachs

Wow, I'm so glad the Great Father Ben is looking after us. Is this cocky, or what?:

The economic repercussions of a stock market crash depend less on the severity of the crash itself than on the response of economic policymakers, particularly central bankers.
Ben Bernanke

So equity markets mean nothing to capital formation and investment? My Economics professors would disagree, but they were so "last century," before endless "stimulus" could fit into their theories which always boiled down to "increasing money supply endlessly = bad thing." Seriously, I'm not sure what Ben was trying to say here, but I will give him the benefit of the doubt that he is not, in fact, the most clueless economist of all time. Not sure if he's second worst, though. Thanks for sharing, Ben:

A collapse in U.S. stock prices certainly would cause a lot of white knuckles on Wall Street. But what effect would it have on the broader U.S. economy? If Wall Street crashes, does Main Street follow? Not necessarily.
Ben Bernanke

Ron, meet Ben. Ben, meet Ron:

After 1929, so many people had been traumatized by the stock market crash that there was a lost generation.
Ron Chernow

I know we can't criticize Saint Warren, so I'll just note it probably helps if you are a Billionaire. Oh, and let them eat cake, too - as long as Warren is selling it::

Wide diversification is only required when investors do not understand what they are doing.
Warren Buffett

All right, before you think I have it in for The Great Man, here's another quote from him that is quite interesting these days (he said it back in 2000):

Nothing sedates rationality like large doses of effortless money.
Warren Buffett

I understand Mr. Cuban said that he rarely invests in stocks. The quote below probably sounds so stuffy and outdated now, doesn't it, with market dividend payouts as a percent of price at record lows?

I rarely think the market is right. I believe non dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.
Mark Cuban

Do you hear this guy's name mentioned much these days?

Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.
Benjamin Graham

Stock market declines? This guy must have been trading in the last century:

You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets.
Peter Lynch

I am no fan of George Soros, but you can't argue with his financial success in life:

Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.
George Soros

This has to sound so dull and old-fashioned now. Or does it? Ivana didn't do so badly in life, either:

I made a tremendous amount of money on real estate. I'll take real estate rather than go to Wall Street and get 2.8 percent. Forget about it.
Ivana Trump

Oh, but this time is different, just ask Ben Bernanke:

Actually, one of the better indicators historically of how well the stock market will do is just a Gallup poll, when you ask Americans if you think it's a good time to invest in stocks, except it goes the opposite direction of what you would expect. When the markets going up, it in fact makes it more prone toward decline.
Nate Silver

Well, Mr. Bernard Baruch, you would probably know:

The main purpose of the stock market is to make fools of as many men as possible.
Bernard Baruch

The below quote by Mr. Cramer reminds me of a quote from an old movie in a way that nobody probably is going to understand, but I'll post it anyway:

                         Good morning, my American friend!
                         There will be trouble if you go
                         this way. A good Turk always walks
                         to the right. Left is communist.
                         Right is good. You must go the
                         other way... It's Good.

All right, here's what made me think of that:

We are all wrong so often that it amazes me that we can have any conviction at all over the direction of things to come. But we must.
Jim Cramer
This is the truest stock market quote you ever will read in your life. Ever:

"I know that to be successful, I have to be frightened." - Paul Tudor Jones
Amen. Can I get an AMEN to that????

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