STREET DOGS

Never argue with stupid people. They will drag you down to their level and then beat you with experience” – Mark Twain.

No one knows what’s going to happen in the future and there are people that look at both sides of an argument and make decisions using realistic probabilities. The problem is that they tend to get drowned out by those overconfident prognosticators that make their predictions with complete certainty.

“These perma-bulls and perma-bears don’t like to see both sides,” says Ben Carlson at A Wealth of Common Sense. “They have their views and nothing you can say will change them.”

Typical perma-bull arguments: Cash is waiting on the sidelines; forward price:earning ratios are low; this is a buying opportunity; we’re cautiously optimistic; the market may be a bit stretched but there are pockets of value. While perma-bears mainly talk about CAPE ratios, the latest from Zero Hedge, Marc Faber, the Chinese government, charts that look exactly like 1929 or 1987, Greece, Japan, 1966-1982 and either hyperinflation or deflation.

When economic growth is picking up the bulls will expect profits to increase while the bears will point out that the stock market is not the economy. When oil prices are down the bulls will talk about consumers getting a boost in their pocketbook, while the bears will take it as a sign that the economy is doing worse. The bulls see the millennials coming to the market in hordes, the bears see the boomers destroying the market when they retire.

Both sides have their expert theories, data and charts to support their case. Some of it so persuasive, that it’s impossible to ignore. But neither is likely to be completely or consistently right.

The bottom line is: you can’t blindly follow anyone’s argument because it sounds intelligent or lines up with your current thinking.