Permabears are Ridiculous People (with Josh and Michael)

Key takeaways

Permabears often misuse data to justify their long-standing bearish outlook, which can mislead investors.
There is a distinction between necessary skepticism in finance and an unyielding negative view that fails to adapt.
Audience psychology plays a significant role in the continued influence of permabears, who attract those with similar fears.
Investors should be prepared for market downturns but maintain a long-term optimistic view to navigate volatility.

Summary

Permabears and Their Implications

Josh and Michael delve into the phenomenon of permabears—investors who consistently predict market downturns and shy away from equities. They express frustration at a well-known permabear taking a victory lap, arguing about the validity of his long-term forecasts and how cherry-picking data can mislead investors. The discussion revolves around the impact of such opinions on market behavior and the necessity of critical thinking when consuming financial commentary.

The Role of Contrarian Views

The hosts acknowledge the importance of diverse perspectives in investing, stressing that there is room for differing opinions. They debate what constitutes 'the other side' in market discussions and whether the extreme bear stance has any merit. The conversation emphasizes the difference between constructive skepticism and entrenched negativity, questioning whether there is still a place for analysts who perpetually predict doom.

Audience Reception and Influence

Josh and Michael explore why permabears still receive airtime despite their track records, noting the appeal such rhetoric has for certain audiences. They describe how these views resonate especially with older investors who long for a time they perceive as better. The talk touches on the notion that people often seek confirmations of their fears rather than balanced narratives.

Investing Mindset: Managing Expectations

Shifting gears, the hosts address the mindset investors should adopt towards market fluctuations. They discuss the significance of managing expectations and being prepared for downturns while maintaining an overall optimistic view on long-term growth. They draw attention to the youth in investment spaces gravitating towards other domains like cryptocurrency, indicating a shift in beliefs towards central banking and stock markets.

Show notes

This week, one of the most well known permabears came out and took a victory lap despite the fact his commentary has been negative about stocks forever.
But it's a trick...
People can pick different indexes, use price versus total return data, cherry pick from among their own statements and do all sorts of other jiujitsu to hide their bad calls. Investors would do better to ignore all of it, but this is hard - so being armed with this knowledge is the next best thing.
Read Michael Batnick's explanation here:
https://theirrelevantinvestor.com/2019/04/02/how-to-be-wrong-and-think-youre-right/
Enable our Alexa skill here - "Alexa, play the Compound show!"
https://www.amazon.com/Ritholtz-Wealth-Management-LLC-Compound/dp/B07P777QBZ
Talk to us about your portfolio or financial plan here:
http://ritholtzwealth.com/
Obviously nothing on this channel should be considered as personalized financial advice just for you or a solicitation to buy or sell any securities. Please see this 3,000 word terms & conditions disclaimer:
https://thereformedbroker.com/terms-and-conditions/
Hosted on Acast. See acast.com/privacy for more information.
Learn more about your ad choices. Visit megaphone.fm/adchoices