This blog post originally appeared on RealMoney Silver on July 6 at 8:30 a.m. EDT.In contrast to the complacency that embodied the rally in the S&P 500 when it vaulted over 1,230 in April, fear has now been introduced into the market.
The Ranks of Cassandras Grow
For a rough parallel, he said, go all the way back to England and the collapse of the South Sea Bubble in 1720, a crash that deterred people "from buying stocks for 100 years," he said. This time, he said, "If I'm right, it will be such a shock that people will be telling their grandkids many years from now, 'Don't touch stocks.' -- New York Times interview with Bob PrechterOn cue, the New York Times Jeff Sommer prominently interviewed Bob Prechter in Sunday's Business section. The Elliott Wave devotee is forecasting a DJIA "well below 1,000 in the next five or six years." Prechter's comments are a classic example of Roubini-like hyperbole. As I have often written, both perma-bulls and perma-bears are attention-getters, not money-makers. Avoid their views like plagues. I do. Those views might make for juicy headlines, but they are not typically substantiated by rigorous in analysis. Importantly, their views rarely prove accurate or value-added. It is for these reasons and others that the reputations of Cassandras are not usually long-lived.