Juggling Dynamite

MSN Money does a series of slideshows on market data which are often illuminating in terms of macro trends and big picture. This one: The bear market blues: 10 costly declines offers some interesting historical capture on 10 “bear' markets of the 1900's (not sure how they picked these ten, there were several other bad ones that were not included in the series).
Note some common themes throughout on human behaviour driving erratic markets. And keep in mind that only those not prepared for bear markets get mauled by them. Exit rules are required.

I miss my grandparents. They have been dead for 26 years but I still think of them daily and miss them a lot. They lived through the depression; they knew how to make life from scratch. They were self-sufficient in ways that our generation seems unable to imagine. As a young analyst looking for mentors and wise counsel in the money business, I came up empty a lot. It seemed that the wise ones were extremely scarce and almost always at least 75 years old. Multi-decade experience reaching back to the 20's seemed to leave an indelible stamp of insight on a few. The trouble with 80 year olds is they eventually end sooner than we would like.
In April 2006 we lost John Galbraith. Last year Peter Bernstein and John Templeton in 2008. Paul Volcker, Warren Buffet and Charlie Munger are now 80 +. I guess they plan to just drop in their tracks some day; trying to teach right to the end. Trouble is I don't see many younger candidates to take their place to day. This interview with Charlie Munger is refreshingly candid.

Governments have gone to extremes trying to prop up and save home prices from the normal corrective forces of over-supply and weak demand. The trouble is they have blown a fortune trying to stop the inevitable reckoning process, and in the end the dominant forces of downward prices will surely resume. As we have seen in Japan over the past 20 years, the more governments try to stop the correction needed the more they drag out the painful process. Housing expert Robert Shiller talked on CNBC yesterday about the double dip risks to the economy ahead. The bottom line is that governments are not magicians who can solve over-capacity problems with a flick of their fiscal wand; they can elongate the problems, but they cannot “fix” them. I think 2010 will be the year when the world wakes up to this realization.