Read these and tell me if we’re dealing with irrational panic:
I know that I write about Jesse Colombo AKA @TheBubbleBubble from time to time. And I wish it was in an ironic way – but it isn’t. He’s all about the gloating when any market shows any signs of dipping, and all about the portentous warning when any market isn’t dipping.
As I said in my last post about him back in April:
His general formula seems to go something like this:
- Pick a country/market/market-in-a-country.
- Find graphs.
- Declare Doom.
Thus far, apart from the stock market bubble prediction (although, to be fair, this is really a rince-and-repeat of a longstanding series of stock market bubble predictions), here’s a list of his other predicted “Current Bubble” bursts:
- New Zealand
- The Philippines
- South Africa
- Social Media
- Emerging Markets (Russia, India, China and Brazil)
- US Colleges
- US Healthcare
- A Post-2009 US Housing Bubble AKA Global Crisis 2.0
- Housing Bubbles in:
- The UK
- The Netherlands
Which is a thoroughly neat way of keeping your bases covered: just predict bubbles in everything (except for Japan, apparently?). Because then, obviously, at the first sign of swings, you can prance around telling people so.
Well, he’s telling us so. While adding “start-up bubble” and “Tech Bubble 2.0” to the list.
Also, meet one of his fans, who was once an advisor to Gordon Brown:
He has some advice (but no longer for Gordon alone – it’s now for all of us):
People need to calm down.
Technically speaking, it seems clear that the sell-off isn’t over (at least, this is what I hear from the technical people that watch such trends). But a market sell-off is not Armageddon. It’s just a market sell-off.
And the best thing to do in a market sell-off is just ignore it.
For good reasons why, here is a great article from the clever folks at FiveThirtyEight: “Worried about the Stock Market? Whatever you do, don’t sell.”
And as a general observation, I want to point out that the doomsayers are arguing for an outcome that has never really happened before. It may have happened once or twice, in one or two countries, at some or other point in time – but on a global scale?
I’m not saying that it’s impossible. But I would argue that it’s highly highly unlikely that 2015 is the year in which the doomsayers are actually right.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.