Lose the Fear and Find Some Low-Priced Gems

Fear will rear its ugly head again in the next few months. You're going to see more companies go belly-up. You're going to hear quarterly profit numbers that'll make you gag. Economists will tell you we're in a protracted economic decline, and that it will be years, not months, before we recover.

Fear has had its day in the sun. From here on out, ignore it.

Everybody knows that the unbridled pursuit of profit -- pejoratively known as greed -- got us into the current economic mess. Ironically, it's the pursuit of profit that's going to get us out, and sooner rather than later.

Banks are afraid of their own shadow? They won't lend? Relax. It won't last. When they peek out from their bunkers, they'll see a steep yield curve and loan demand that outstrips supply. They don't have to lend to speculators to make gobs of money. There are scores of strong credits to lend to, credits that have a boatload of collateral.

Lots of investors have sworn off stocks, saying they would rather stuff cash inside a mattress or invest in T-bills, where the yield is a tiny bit better. But they'll be back. They'll all be back, eventually. For many, though, it will be years before they venture into stocks again. And that's too bad, given the opportunities in the current market.

No other asset class can hold a candle to stocks. Stocks don't beat every other category by a whisker or two. The long-term performance gap is wider than the Grand Canyon: Stocks outperform, by double or more, all other asset classes. If you insist on avoiding stocks, remember to come back sometime this century. If the market compounds in this century at the same rate as in the last one, the Dow Jones Industrial Average will eclipse 2,000,000 in the next 91 years.

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At time of publication, Alsin and/or ACM was long TECUA, BA and DELL, although holdings can change at any time.

Arne Alsin is the founder and principal of Alsin Capital Management, a California-based investment adviser. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Alsin appreciates your feedback; click here to send him an email.