Death of Equities, II

Bullish stuff from the WSJ tonight:

…across the financial markets, a sea change is taking place. Investors are abandoning the time-tested “stocks for the long run” optimism that dominated since the late 1980s. Instead, there is a widening belief that the mess left behind by the housing bubble and financial crisis will be a morass to contend with for years.

via Pivot Point: Investors Lose Faith In Stocks –


  1. If the cyclically adjusted PE ratio is still well above historical average, it's logical for people to be bearish

  2. All returns will fall, but that will tend to increase asset prices. Already dividend yields exceed treasury rates.

  3. Wake me up when there's a good Newsweek cover. The marginal investors (baby boomers and their pension funds) still haven't dialed realistic expected returns into their savings plan or consumption patterns. They're low on gas and the landing strip is far. The current storyline on CNBC (always a useful signal) is that buy-and-hold may be dead, but the ever-so-helpful guests can help viewers time the market. They'll be peddling "defensive" stocks all the way down the Slope of Hope, until their airtime gets turned over to infomercials for kitchen appliances. See you there and via con Dios!


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