Our Top 10 Most Popular Market Commentaries of 2021
As is our custom, we conclude the year by reflecting on the 10 most-read market and economic commentaries over the past 12 months.
In decreasing order, based on the number of unique readers, those are:
While I do not know where Bitcoin’s price heads next, I believe that its actual value is zero, for the following reasons.
Throughout the pandemic, housing has been one of the stalwarts of the economy along with the sustained level of consumer spending that was made possible by massive government stimulus.
The question I get most often is “when is the next bear market?” There are three specific items that tend to predict bear markets and recessions with some accuracy.
The United States is just at the beginning of a housing boom that could last for the next five years.
The 2020s are going to be about rifle shots, not the shotgun approach of index funds.
Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this [bull market] event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000.
From 1949 through 1964, the S&P 500 enjoyed an average annual total return of 16.4%. In the 8 years that followed, through 1972, the total return of the index averaged a substantially lower 7.6% annually; strikingly close to the 7.5% projection that Graham had suggested based on prevailing valuations, yet still providing what Graham had suggested would likely “carry a fair degree of protection” against inflation, which averaged 3.9% over that period.
Nothing so animates a speculative herd as a parabolic price advance in an asset detached from any standard of value. I am convinced that future generations will use the present moment to define the concept of a reckless speculative extreme, in the same way our generation uses “1929” and “2000.”
The word “bubble” is tossed around quite a bit in the financial markets, but it’s rarely used correctly.
While the Fed notes valuations are elevated, the crucial message to investors gets obfuscated. From current valuation levels, the expected rate of return for investors over the next decade will be low.