I liked this dude's book on the GameStop era so I'm willing to click on his columns.
This one was pretty edgy
But he's right... there's nothing like a big, bad crash to wash out stupidity and leverage and froth. Clean the pipes, you know
When Michael Corleone asks Clemenza in “The Godfather” about the mob war he’s about to start, he gets the sort of reassurance that comes with experience. “These things gotta happen every five years or so, ten years. Helps to get rid of the bad blood…been ten years since the last one.”
I mean, maybe we don't have to go Corleone-style on this but you get the picture.
A downturn like 2007-09 when U.S. stocks fell by more than half can be both awful and therapeutic. It took 66 months for the S&P 500 to regain its previous high. Investors with a long-term perspective pounced on what in hindsight were solid, boring bargains near the bottom.
Long bear markets accompanied by a recession discredit the last boom’s wildest themes and its cheerleaders. They also remind us of what capital markets are for: matching mostly good businesses with patient savers’ nest eggs.
It's a flesh wound
"Hardly anyone younger than 40 now even had a 401(k) during the 2007-09 wipeout. Most Wall Street pros hadn’t graduated from college yet."
Bear markets are educational, but the tuition is a doozy.
archive: https://archive.md/33OCy