Stock market history teaches us nothing
Every bull market that leads to a bubble finds its own set of buyers. So it happened in the US as well. Most of the investors had not seen a bear market. The US had been seeing a continuous bull run since 1982 (one or two hiccups not withstanding).
As Mahar writes “As for the old investors who suffered through the crash of 1973-74, by the time the next bull market began eight years later, the majority had retired from the field, so badly burned they would never touch a stock again. As a result, most of the investors, who buoyed the bull market of the nineties had never seen a bear. In 2002, fully 56 percent of those who owned stocks or stock funds had purchased their first shares sometime after 1990, while 30 percent of all equity investors had gotten their feet wet only after 1995”.
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Labels: Book Review
