Here's a post I made sometime in November 2008. Since panics drive stock prices to irrational and unsustainable lows, when this panic ends we are likely to see a monster rally. After such a panic, this means radically reduced volatility and a major stock market rally.The sheer levels of fear driven by such volatility were so irrational on the downside that the subsequent upside will probably end up breaking a lot of records as well. Betting long like Birchtree during a stock panic is the ultimate high-potential contrarian play and the opportunities presented by this stock panic are vast beyond belief. Since there is blood flowing in the street, and no one wants stocks, fortunes will be made by those brave few contrarians willing to buy when everyone else is selling. (Geesus, I made 432 purchases and spent $800K trying to fill up that deep well.) I will continue to ride the secular bull through turbulent spells. The stage has now been set for investment opportunities that will make anything I've seen over the last 30 years pale by comparison. It takes a lot of intestinal fortitude and patience to believe an upswing is ahead. Many of my stocks are poised for a resurgence. Dollar cost averaging in both my accounts has allowed me to leverage the market during this period of decline. The stock market is still the best long term investment strategy for a significant portion of one's assets. Now is the time to position your portfolio for the upcoming rebound, whenever it might start. Wait for definitive proof that it is underway, or that the economy has recovered, and you could miss out one some of the market's biggest gains. In the long history of the economy in general and the markets in particular, optimism has been rewarded far more often than pessimism. The market always looks ahead and begins its next bull market while a recession is still underway and worsening, while public investors are at an extreme pessimism. (And I continue to blaze my own trail today.)
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