Harbingers of Doom

You can tell you are in a bad market when all the old bull stories come out again. I remember in 2000 being told by a fervent believer in Lernout & Hauspie (RIP) how if a stock went down 2% a day and you bought every day on the way down until it had halved in price, then it turned around and went up 2% every day, you would make your money back a fortnight into the turnaround. Or something. It doesn't matter. Lernout went down and down and then defaulted.

It's the same with the Buffett quotes. From the WSJ:

If a stock [I own] goes down 50%, I'd look forward to it. In fact, I would offer you a significant sum of money if you could give me the opportunity for all of my stocks to go down 50% over the next month."

And yes, if you are as good a stock picker as Warren, that's true. But if you are not, and the chances are you are not worth tens of billions, so you really really aren't, then it is just a great way to get hosed on a bigger notional. Be careful out there people, and keep the poker face. It's not over yet.