I’ve been reading a lot of commentary and watching a lot of pundits on CNBC today and of course the “don’t panic”, “this is a buying opportunity”, “keep a long term perspective” crew is out in droves. These guys come on TV or write about how to keep cool, be rational, don’t give in to the panic.
But their self assurance is troubling to me.
For one thing, stocks go down sometimes – sometimes for a long time. They’re called bear markets. And, in those cases, people who said to buy the dips would be wrong. They’ve been wrong before – though not lately – and they could be wrong again.
Second, is this really just emotional panic without any relation to financial reality? I mean answer me this: is the housing market not blowing up? Are people not late and defaulting on their mortgages at alarming rates? Are investors not pushing back on risky debt causing a tightening of liquidity in the system? Have we not had a 4 or 5 year bull market that has carried stocks, worldwide, to record levels?
So, look, these “don’t panic”, “buy the dippers” could be right. I have no idea if stocks are going to bounce in the next couple of weeks. I’m not necesarily saying that they are without a doubt wrong. But for them to dismiss the facts and put this correction all on emotion and panic is completely, totally, 100% ridiculous.