Oh, sure. This could be one of those daily comments that tells you why the stock market went up or down yesterday or, better still, what it will do tomorrow.
“A crash is no more than weeks away,” famed market seer Granville told Barron’s last September. “Sometime over the next month and a half, we will witness a stock market crash comparable to the legendary disaster that shattered Wall Street 66 Octobers ago” in 1929. (I stopped following Granville’s pronouncements the day he reportedly dropped his trousers at one of his investment seminars, decades ago — seminars which had come to involve a piano, for reasons that have blurred in my memory with time.) But by his lights, “the signs [were] unmistakable.” “All that I have learned in analyzing the market over the past 40 years tells me: The end is near.”
Now, correct me if I’m wrong, but looking back to last September — was there a gargantuan 1929-style crash in there someplace I just missed somehow? Maybe the day I was watching that Seinfeld marathon and forgot to check CNBC?
Or take this newsletter solicitation from someone named Nick Guarino who, according to the outer envelope, “predicted the 1987 stock market crash and turned $200,000 into $14 million for his associates in a day.” Postmarked September 2, 1995, from Minneapolis, it was an “URGENT WARNING. You have less than 100 days to the biggest stock market wipeout of our lifetime. The stock market is about to give back a year’s worth of gains in one day. . . . We are on the verge of the biggest bear market ever. Before it’s over, the stock market will be trading under 2000.”
Hmmm. Add 100 days to September 2 — his measure, not mine — and you get December 11 as the date by which the crash will occur. Here we are several days past that cut-off (well, 240 days, actually), and the wipe-out has not yet appeared.
Not to be smug. Mr. Market is at his best seeking out and demolishing smug. Show me a smug investor, and I’ll show you an investor about to get blind-sided somehow.
So I’m not trying to jinx things by making fun of these predictions. And I’m certainly not discounting the possibility of another major bear market someday. All I’m trying to discount is the value of daily market comments, where guys tell you buy! sell! whatever! based on their reading of the tea leaves or their need to sell newsletters.
Which is why I prefer to write my daily comments about things like Ripley’s Believe It Or Not.
Faithful visitors to this web page will remember that in a recent “comment” I provided the cure for the common cold. A little off subject, perhaps, but useful all the same. Missed it? Too bad! (Oh, OK: the secret is to swill just the tiniest sip or two of apple cider vinegar the minute you begin to feel that tingle where your sinuses meet your tonsils.)
In connection with that comment I referred to one of my favorite childhood books, Ripley’s Believe It Or Not. So then, after signing off, I logged on to www.amazon.com, my new favorite neighborhood bookstore, and quickly located a whole bunch of Ripley’s paperbacks, several of which appeared at my door a few days later. Ah, brave new world.
And I have to tell you I was shaken. Not that Donald Case and his stepfather Glen McGraw were both stricken with appendicitis “on the same day”, relatively hard though I found that to believe. Nor that “the Peace Poplar planted in Jena, Germany, in 1815 to celebrate the end of the Napoleonic war with France toppled suddenly 99 years later on August 1, 1914 — the start of World War I.” (Believe it or not.)
No. I was shaken when I read that “Mrs. E.H. Bisch’s 3 children of Santa Rosa, Calif., all have the same birthday! The odds against three children in the same family being born on the same date are 28,000,000 to 1.”
What shocked me of course was not that they were all born May 28, but rather the fact that in 100% of the cases where I could actually check Ripley’s veracity — namely, this one — I found it sorely wanting. Yes, I know he says “believe it or not,” but isn’t the whole idea that these things are unbelievable, yet true? And I still like to think they’re mostly all true.
But my faith is shaken, because as many of you instantly grasped, Ripley’s math is just silly. The odds of three kids in a three-kid family all being born on May 28 are indeed about 1 in 28 million (365x365x365). But who said anything about May 28? The first kid could have been born any day — the odds of that are 100%. So what are the odds each of the next two would be born the same day, wherein lies the remarkable occurrence? The answer is 1 in 133,225 (365×365), if you don’t nag me about leap years. Not common, to be sure. Not likely. But not 1 in 28 million, either.
The point is: it makes me worry that maybe the well that supplied water for Christopher Columbus’s three ships didn’t “dry up suddenly on May 20, 1506, the die Columbus died.”
I’m not saying I don’t believe it. I’m just shaken. That’s all.
Quote of the Day
That I'm their competition.~Famed hedge fund manager Michael Steinhardt, when asked the most important thing an investor could learn from him.
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