Wall Street Debate: Should You Jump Ship or Hold On?

“Bull markets climb a wall of worry.” — Maxims of Wall Street, p. 64

After the stock market rose 25% last year and rallied even more after the November elections, investors are worried that the good times are over.

There’s growing fear on Wall Street that the stock market is headed for a crash or a bear market. Analysts worry about inflation, interest rates, Fed policy, tariffs, war, another pandemic and other “black swan” events.

As I said at the Vegas MoneyShow last week, “Tech stocks could fall in half and still be overvalued!”

Analysts warn that the first year of the new Presidential Cycle is the riskiest. (See chart below.)

In the 11th edition of “The Maxims of Wall Street,” J. Paul Getty, America’s first billionaire, advised us not to worry and to stay fully invested. The market will make a comeback. He wrote:

“The seasoned investor buys his stocks when they are priced low, holds them for the long-pull rise and takes in-between dips and slumps in his stride.” (p. 136)

As Warren Buffett says, “Never bet against America.”

On the other hand, Mike Turner, who is a market timer, cautions investors with the following advice:

“Buy-and-hold works if you live long enough, never need the money and don’t mind losing 50% or more from time-to-time.” (p. 137)

Who’s right?

‘Give me a one-handed economist!’

President Harry Truman famously complained about economists by saying, “Give me a one-handed economist!” because he felt they were always hedging their answers with phrases like “on the one hand” and “on the other hand,” and he wanted clear, definitive advice instead of qualified opinions on both sides of an issue.

I have to plead guilty of offering both long-term advice (in my monthly newsletter, Forecasts & Strategies) and short-term advice (in my trading services). See www.markskousen.com.

My best approach is to offer advice for both long-term investors and short-term speculators.

“There’s more than one way to climb a mountain.” (Maxims, p. 68)

Contradictory Advice in the Maxims!

Recently, a subscriber approached me at an investment conference and asked, “Have you noticed how often your quotations in ‘The Maxims of Wall Street’ contradict one another?”

I decided to check, and indeed, it’s often the case. Veterans on Wall Street sometimes sharply differ on their investment philosophy.

I found a bunch of examples… and frankly, one can easily understand each viewpoint. Take a look.

#1: Hold on or sell?

“Nothing is more difficult than holding on to your stocks in a bear market.” — Mike Turner (p. 109)

Versus:

“Nothing is more difficult than holding on to your stocks in a bull market.” — Jim Dines (p. 107)

#2: Rising or falling?

“The only sound reason for my buying a stock is that it is rising in price.” — Nicholas Darvas (p. 117)

Versus:

“The dumbest reason in the world to buy a stock is because it’s going up.” — Warren Buffett (p. 117)

#3: Save or spend?

“One of the dumbest things you can do with money is spend it.” — Robert Wilson (p. 23)

Versus:

“The more I earn, the more I spend. I don’t want to die rich.” — Jesse Livermore (p. 24)

#4: Act on your gut or your mind?

“When you get a hunch, buy a bunch.” — Hetty Green (p. 32)

Versus:

“Look at investments coldly, allowing no sentiment to play any part.” — Gerald Loeb (p. 127)

#5: Buy cheap or dear?

“Buy cheap, sell dear.” — Baron Rothschild (p. 35)

Versus:

“It’s next to impossible to know what is ‘cheap’ and what is ‘dear’ in stock prices.” — Gerald Loeb (p. 35)

#6: Their blood or yours?

“Buy when blood is running in the streets.” — Baron Rothschild (p. 43)

Versus:

“The problem with being an early contrarian is that the blood in the street is often your own.” — Ron Miller (p. 43)

#7: Greed is good or bad?

“Greed is good.” — Gordon Gekko, “Wall Street” (1987), (p. 67)

Versus:

“Sorry, Gekko, but greed is not good. Look where it got you (in jail).” — Anthony Scaramucci, (p. 67)

#8: Pig or Hog?

“It takes courage to be a pig.” — George Soros (p. 59)

Versus:

“When a pig becomes huge, it gets slaughtered.” — Wall Street saying (p. 65)

#9: Conservative or risk taker?

“The way to be safe is never to be secure.” — Jim Davidson (p. 53)

Versus:

“They measure may be thought bold, but I am of the opinion that the boldest are the safest.” — Admiral Horatio Nelson (1801), (p. 54)

#10: Think or feel?

“Don’t think, feel!” — Bruce Lee

“Don’t feel, think!” — Ayn Rand

“Don’t think, look!” — Jim Dines (p. 98)

#11: Learn from history or logic?

“A page of history is worth a volume of logic.” — Oliver Wendell Holmes (p. 121)

Versus:

“In times of rapid change, experience could be your worst enemy.” — J. Paul Getty (p. 124)

#12: Buy and hold or take profits?

“Good investing is simple: Buy a good asset at a good price and hold onto it a good long time.” — Adrian Day (p. 197)

Versus:

“Marry a wife, not a stock.” — Wall Street saying (p. 129)

#13: Hold on or let go?

“Buy good stocks at cheap prices and hold on.” — Dick Davis (p. 169)

“Always sell half on a double.” — Yale Hirsch (p. 129)

“Don’t let a stock go stale on you.” — Jesse Livermore (p. 129)

#14: Quick profits or invest for the long term?

“Better to get a fast nickel than a slow dime.” — Robert Allen (p. 134)

Versus:

“Don’t be in a hurry to take a profit.” — Jesse Livermore (p. 134)

Single Lines That Make You Think

Some advice and sayings contradict themselves in one line, such as:

“To win big, you have to bet on the underdog. But not every underdog hunts!” — Wayne Allyn Root (p. 48)

“Easy money — isn’t!” — Ken Fisher (p. 50)

“Those who try to make a killing usually get killed.” — Julian M. Snyder (p. 51)

“It’s often a long road to quick profits.” — Humphrey Neill (p. 53)

“The price of being right is first being wrong.” — Anonymous (p. 61)

“There’s just as much profit potential in high-quality stocks as there is in low-quality stocks.” — Geraldine Weiss and Janet Lowe, (p. 71)

“There are clear lines separately those who swear by him and those who swear at him.” — Louis Rukeyser on Joe Granville and Howard Ruff (1981), (p. 75)

“What does it take to become a consistently successful money manager? Over time the most common answer is a string of devastating losses.” — John Dessauer, Dessauer’s Journal (p. 86)

“Gambling: The sure way of getting nothing for something.” — Wilson Mizner (p. 91)

“Nothing is more suicidal than a rational investment policy in an irrational world.” — John Maynard Keynes (p. 97)

“There are old traders and there are bold traders, but there are no old, bold traders.” — Anthony M. Gallea (p. 119)

There’s Gold in the Maxims of Wall Street!

You can see why Dennis Gartman, editor of the Gartman Letter, says, “It’s amazing the depth of wisdom one can find in just one or two lines from ‘The Maxims of Wall Street.’ I have it on my desk and refer to it daily.”

Every investor should have a copy of this “Golden Bible of Investing” as Alex Green, the chief investment strategist at the Oxford Club, calls it. He writes:

“Mark Skousen has collected a treasure trove of proverbs, slogans, stories and juicy quotes in the Maxims. He provides plenty of stories and commentary to go with these gems. I refer to it regularly.”

A Financial Quote for the Day

At the most recent Vegas MoneyShow, Kim Githler bought 50 copies to give to her supporters.

Kim told the audience, “It’s my favorite financial book. Every quote is a lesson in finance.”

At the MoneyShow, I met up with one of our new editors at Eagle, Hugh Grossman, who writes the popular “Day Trade Spy” trading service.

He wrote our publisher the following: “I must say, I have a bone to pick with Mark. I bought his book, ‘The Maxims of Wall Street,’ and it kept me glued to it until about 2:30 this morning when I could no longer stay awake… it is just that compelling! Most other trading books are a sure cure for insomnia… not Maxims! Well done, Mark! Getting that book was worth every cent of the trip for me.” Thank you, Hugh.

The Maxims isn’t just a series of financial quotes, but each statement is found in a specific category, such as “growth and income,” “contrary investing” and “penny stocks and gold bugs.”

Plus, there are lots of short stories, including the ever-popular “Rich Man’s Pearls of Wisdom” (six in all).

That’s what I hear from readers more and more. They don’t just read it once and put it on the shelf gathering dust. They keep it in their office or bedroom and read from it regularly.

Subscribers continue to order multiple copies — including one order this week for a whole box (32 copies) — to give out to friends, relatives, colleagues and clients. It makes the ideal gift.

As Bert Dohmen, editor of the Wellington Letter, states, “Beautifully bound collector’s item, it should be on every investor’s bookshelf and read regularly.”

Despite rising inflation, I’ve kept the price at a bargain: $21 for the first copy, and all additional copies $11 each. (A full box of 32 is only $327.) I autograph and number each copy and mail them at no additional charge inside the United States.

Order one or more copies today at www.skousenbooks.com.

Good investing, AEIOU,

Mark Skousen

You Nailed It!

Washington Post Adopts a Free Market Approach

by Mark Skousen

“I am for America. We are going to be writing every day in support and defense of two pillars: personal liberties and free markets.” — Jeff Bezos, CEO of Amazon, to the Washington Post editors

Jeff Bezos, like Elon Musk, is another billionaire shaking up our nation’s capital. For years, he took a hands-off editorial approach after buying the Washington Post. Now things are changing. He fired the Post editor, and sent this email to the Post editors:

“I’m writing to let you know about a change coming to our opinion pages. We are going to be writing every day in support and defense of two pillars: personal liberties and free markets.

“We’ll cover other topics too of course, but viewpoints opposing those pillars will be left to be published by others. There was a time when a newspaper, especially one that was a local monopoly, might have seen it as a service to bring to the reader’s doorstep every morning a broad-based opinion section that sought to cover all views. Today, the internet does that job.

“I am of America and for America, and proud to be so. Our country did not get here by being typical. And a big part of America’s success has been freedom in the economic realm and everywhere else. Freedom is ethical — it minimizes coercion — and practical; it drives creativity, invention and prosperity.

“I offered David Shipley, whom I greatly admire, the opportunity to lead this new chapter. I suggested to him that if the answer wasn’t “hell yes,” then it had to be “no.” After careful consideration, David decided to step away. This is a significant shift, it won’t be easy, and it will require 100% commitment — I respect his decision. We’ll be searching for a new Opinion Editor to own this new direction.

“I’m confident that free markets and personal liberties are right for America. I also believe these viewpoints are underserved in the current market of ideas and news opinion. I’m excited for us together to fill that void.”

Glad to hear it!