RUNNING OF THE BEARS

Today is a special bonus post.

Back in February, I wrote a post called, “RUNNING OF THE BULLS.”  It was about my Dad constantly and endlessly predicting stock market crashes in the mid 1980s.  Upon further examination, his reasoning was unsound.

He carried an opinion, probably formed by his own direct experience of the Great Depression of the early 1930s, about credit card debt in the 1980s.  I researched it at the time and found that there was no such growth in total consumer credit.

Yet, as we all know, there was a terrific market break in October 1987.  So was Dad right after all?  Yes, he was — but not for the reasons he gave, which significantly discounted his talent as a stock market forecaster.  As reviewed in my subsequent post, “SCRATCH ON THE POOL TABLE OF LIFE,” the market tanked because of the unsustainably high value of the US dollar at the time.

My “ANALYZE THIS” story was about one of the greatest contrarian minds in our world today.  And also my Columbia Business School Professor for Securities Analysis, Jim Rogers.

It just so happens that Jim is back in the news this week.  He made a prediction this past week of the “worst crash in our lifetime” hitting sometime in the next year or two.  Now this reminded me of my Dad’s prediction from 30 years ago.

There is a very big difference, however.

Jim’s prediction is based on very careful analysis mixed with a heavy dose of buy low and sell high.  In my post, “FALLING SKIES,” I pointed out that market crashes happen every 8 or 9 years (depending on the century).  When you read the article below, Jim states:

We’ve had financial problems in America — let’s use America — every four to seven years, since the beginning of the republic. Well, it’s been over eight since the last one.

This is the longest or second-longest in recorded history, so it’s coming. And the next time it comes — you know, in 2008, we had a problem because of debt. Henry, the debt now — that debt is nothing compared to what’s happening now.

For more info, go here: http://www.businessinsider.com/jim-rogers-worst-crash-lifetime-coming-2017-6

Jim says that the trigger this time will be somewhere “where we are not looking.” Similar to the Iceland bankruptcy in 2007.

Generally, these things start just like Jim says. One company (or country) goes broke, setting off a rush for credit.  Then another goes under, followed by a cascade of others.  Then suddenly, credit disappears and everybody is left dressed in barrels.

Jim Rogers might strike some as a peculiar man in a bow tie and an Alabama accent.  But nobody understands supply and demand better in my opinion.

How solvent are the banks in Italy right now, by the way?

More from the Bernard Olcott Story this coming Thursday at 4:16 PM EST!