Is this the top? Will the bull market that has been raging on since 2009 come to a shuddering halt in 2018? Is it time to transition from stocks into bonds, cash, beanie babies and gold?
F*ck if I know. And f*ck if anybody else knows either.
For the past five or six years, people have been predicting that the top has arrived and that a correction is just around the corner. And for the past five or six years, these people have been completely wrong.
Let’s have a look at some good examples.
In 2012, we will see a huge stock market collapse!
This Forex Crunch article by Gregor Horvat predicted a stock market crash in 2012. Why? Because he saw some squiggly lines or something on the S&P 500 chart.
The Great Recession Blog lived up to its name by fear mongering about a “devastating stock market crash” in 2012:
The unprecedented money-mongering of central banks has caused stock exchanges to completely unhitch themselves from economic reality. Markets now react inversely to their economies, a situation that begs for a devastating stock market crash.
That was six years ago. Funnily enough, the author of this blog, David Haggith, recently posted an article titled I Bet My Blog on a 2018 Economic Collapse. Basically, he is going to throw sh*t at the wall until something finally sticks – then he’ll pontificate to everyone about how his prediction was correct. It is worth noting that he also predicted that 2016 would be the year of the economic apocalypse and that he was “fairly sure” that stocks would slump in January, 2017.
The market will definitely crash in 2013.
Investor Peter Schiff warned that it would “blow the 2008-9 financial crisis out of the water.”
Some dude called Erik Henyon uploads a Youtube video in which he predicts that a “massive” stock market crash is going to take place in 2013. He tells us that the crash is going to be so big that the Dow Jones Industrial Average will fall to 6,000.
That year, the DOW grew from 13,000 in January to 16,500 in December.
Universa Investments president Mark Spitznagel tells CNN Money that he is confident that the market will crash or fall by more than 20% in 2013 or 2014. According to Spitznagel, the market moves of 2013 were “unnatural and distorted.” I wonder how his Black Swan fund is doing now?
A 2013 article by John Crudele in the New York Post warns that the stock market is bubbly and “soon-to-crash”.
Will the stock market crash in 2014?
In 2014, Henry Blodget wrote that stocks were 40% overvalued and that he couldn’t find any data to suggest that the market would continue rising. Although he didn’t state that a crash was coming, he did tell us that stocks were likely to give “lousy returns” over the next ten years. He also concluded his article with some technical analysis from John Hussman, which cautioned that the S&P 500 could collapse after it reached 1,900.
Here we are four years later and the S&P 500 is at 2,800.
In 2014, Libertarian politician Ron Paul told the media that the “growth isn’t there” and that the market had to correct because it was “artificial”, “distorted” and “vulnerable.”
In 2014, Questor editor John Ficenec warned that there are signs that we could be in for a crash.
During an interview with CNBC in April, 2014, Swiss investor Marc Faber said:
I think that this year, for sure, maybe from a higher diving board, the S&P will drop 20%. I think, rather, 30%.
He also went on to say that it wasn’t a very good time to buy stocks and that he suspected the market could encounter a “87-type of crash” within 12 months.
In 2015, Michael Snyder from The Economic Collapse Blog lambasted the mainstream media for ignoring the upcoming “nightmarish global financial crisis”. He mentioned that CNBC was calling the dip a bull indicator and that they were encouraging people to buy more stocks.
Sadly, the 358 point plunge for the Dow on Thursday was just the beginning.
If you had listened to CNBC instead of Mr Snyder and his forecast of doom and gloom, you would have made a pretty penny by now.
In June, 2015, Ron Paul was once again warning everyone about “a day of reckoning” for the US stock market.
US stock market WARNING: Fears dangerous bubble could be about to burst, warn experts.
In October, 2015, Donald Trump warned of a looming economic recession. He also stated that the stock market was in a bubble.
In March, 2016, Paul B. Farrell wrote in Market Watch that it was time to start planning for a 50% market crash. A quote from his article:
Most investors don’t want to hear the countdown, will tune out. Basic psychology. They’ll keep charging ahead with a bullish battle cry, about how the Nasdaq will keep climbing relentlessly to a new record above 5,048.
After this article was published, the Nasdaq continued to climb, relentlessly.
Another priceless quote of his:
…a crash is a sure bet, it’s guaranteed certain.
I don’t think Paul understands what a “sure bet” is.
Economist James Dale Davidson tells us that the stock market rally is coming to an end and that a market crash of 50-70 percent is plausible.
Robert Kiyosaki, the author of Rich Dad Poor Dad, predicted that we would witness the worst market crash in history in 2016. He had originally made this prediction back in 2002. In an interview with MarketWatch in 2016, he reiterated his prediction and said “we’re right on schedule.”
Somebody on the Q&A website Quora asks why people are still purchasing stocks when it is obvious that the next stock market crash is just around the corner. This question was asked back in January of 2016 – two years ago. Since then, the S&P 500 has climbed from 1,880 to 2,817.
In January of 2017, James Dale Davidson said that economic indicators were screaming SELL and that a market crash was already on our doorstep.
Trying to time a market crash or correction is pretty much impossible, and trying to estimate how much will be lost in that crash is even more difficult. If you had listened to David Haggith’s doom and gloom warnings back in 2012, you would have missed out on one of the greatest bull runs in history. You also have to realise that permabear “experts” such as Marc Faber exist and that they will constantly make predictions about how the next big market crash is just seconds away. To sum it up: Nobody really knows when it’s going to happen or if it’s worth staying on the sidelines while the market continues to grow upwards. Well, everyone except me of course. I’m 100% certain that a market crash is going to happen in 2018.