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It's fun to read old newspapers. Read from the 1900-2011 period. Read what the experts advice to buy, regular papers is good enough, you dont need finacial papers. One thing that I'm sure is going to happen is that you will see how few companies of what analysts advice you to buy in 1980, 1982 or whenever you want is around today. They totally missed the concept of long term value through buying an expensive quality company. Another thing that will come to your mind is how they miss secular changes, telling people to buy some "cheap" energy stocks far after the bull-market was over. Some experts were calling for the dow to go to around 500 into 1982. Reagen was going to be the hoover of that generation. In one article there was around 12 stocks adviced from different experts, with only one of these stocks being a company I had heard about / still around. That was Geico.
If I go back to 1980-1981, you can read about copper, the mining boom in australia, how one small mining town was very hot, and is even hot today as they are building new houses there now. Read about lofty australian export projections going into 1985. you can read about gold crashing 175 dollar in one day, read about Jim Sinclair indicating gold was fully priced and that it was more than a correction the day after that crash, only to change his opinion later in the year. To get that kind of action in gold now, you probably need a 1000-1400 dollar decline in one day and a gold price around 6000. read about how energy stocks performed poor during the 1982 breakout rally. The volume in 82 came after old all time highs on the indexes were taken out by what an expert calls people that missed the ship, trying to jump into the water and swim after it. Laszlo Birinyi made great calls back in 82, that was one of them. What's really special about 82 is how high the dow was very early in the economic cycle, relative to the old all time high at the time. In other cycles a new all time high have arrived much later.
In 82 it was about the farmland bubble having ended, farmers having a hard time. It's really so many things that's really the same all over again.
What can be learned from the newspapers from the 80-82 era:
Jim Sinclair had his guru days. He had a good call, but screwed it up. Speculation in mining stocks, australia was big, even china was on their radar, experts missed the secular change in energy and commodities, they failed to advice people to buy high quality blue-chips, instead looking for bargains in the old secular bull-market of the 70's. They were also trying to ride the next wave, unknown tech companies, instead of trying to go with cheap stocks from the tested and tried.
More later.
If I go back to 1980-1981, you can read about copper, the mining boom in australia, how one small mining town was very hot, and is even hot today as they are building new houses there now. Read about lofty australian export projections going into 1985. you can read about gold crashing 175 dollar in one day, read about Jim Sinclair indicating gold was fully priced and that it was more than a correction the day after that crash, only to change his opinion later in the year. To get that kind of action in gold now, you probably need a 1000-1400 dollar decline in one day and a gold price around 6000. read about how energy stocks performed poor during the 1982 breakout rally. The volume in 82 came after old all time highs on the indexes were taken out by what an expert calls people that missed the ship, trying to jump into the water and swim after it. Laszlo Birinyi made great calls back in 82, that was one of them. What's really special about 82 is how high the dow was very early in the economic cycle, relative to the old all time high at the time. In other cycles a new all time high have arrived much later.
In 82 it was about the farmland bubble having ended, farmers having a hard time. It's really so many things that's really the same all over again.
What can be learned from the newspapers from the 80-82 era:
Jim Sinclair had his guru days. He had a good call, but screwed it up. Speculation in mining stocks, australia was big, even china was on their radar, experts missed the secular change in energy and commodities, they failed to advice people to buy high quality blue-chips, instead looking for bargains in the old secular bull-market of the 70's. They were also trying to ride the next wave, unknown tech companies, instead of trying to go with cheap stocks from the tested and tried.
More later.
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