https://inflationresistant.blogspot.com/2009/05/inflation-proof-investments.html
I wrote about three stages of inflation in 2009. Sometimes, you have to read your own younger self. I wrote that in the final stage of inflation, there will be new acronyms. Indeed, it was FANG this time. Business cycle is finally coming to an end. All three stages of inflation are over and hopefully, you did well in first two stages and are surviving the final stage.
Today, I will write about bear market. Bear market takes its toll in three vicious ways -
1) Downward spiral of prices. While most people focus on where prices will bottom, they underestimate the stealthy impact of two other ways. They are discussed below.
2) Duration of bear market. This is most lethal and underestimated by people, who are looking to be next Warren Buffet and jump in too early. Bear markets can last months and years. As the saying goes, Markets can stay irrational longer than you can stay solvent.
3) When the next bull does arrive, it is tepid for a long duration. and people do not believe it. It is likely to start in asset classes that was not widely held in the last bull market and therefore holders of the last bull market will not be made even.
I wrote about three stages of inflation in 2009. Sometimes, you have to read your own younger self. I wrote that in the final stage of inflation, there will be new acronyms. Indeed, it was FANG this time. Business cycle is finally coming to an end. All three stages of inflation are over and hopefully, you did well in first two stages and are surviving the final stage.
Today, I will write about bear market. Bear market takes its toll in three vicious ways -
1) Downward spiral of prices. While most people focus on where prices will bottom, they underestimate the stealthy impact of two other ways. They are discussed below.
2) Duration of bear market. This is most lethal and underestimated by people, who are looking to be next Warren Buffet and jump in too early. Bear markets can last months and years. As the saying goes, Markets can stay irrational longer than you can stay solvent.
3) When the next bull does arrive, it is tepid for a long duration. and people do not believe it. It is likely to start in asset classes that was not widely held in the last bull market and therefore holders of the last bull market will not be made even.
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