This Week at MANIFEST (8/7/2015)

“Stock market corrections, although painful at the time, are actually a very healthy part of the whole mechanism, because there are always speculative excesses that develop, particularly during the long bull market.” — Ron Chernow

“You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets.” — Peter Lynch

“After 1929, so many people had been traumatized by the stock market crash that there was a lost generation.” — Ron Chernow

The first ten years of this century are referred to as a Lost Decade.

For those who were concentrated in investments in the S&P 500, it clearly was a “lost decade” as the combined stock prices of the S&P 500 actually ended the 10-year period in nearly the same place they started. There were exceptions, but the carnage was deep. We’ve reminisced before about the October 2001 warnings from Ralph Acampora that index fund investors were “about to get killed.”

There are days when I wonder if we aren’t on the verge of another “lost generation.” Interest in common stock investing has waned to long-term lows and the long-term damage/cost/lost opportunity is likely to be palpable.

I like William Devane. A lot. But as a paid spokesperson for one of those gold companies he’s a disservice. “How many of you were compensated or bailed out by the government after the last crash?”

Answer: None. (1) We didn’t expect to be. No one should. (2) We didn’t need it. Check out the image of Tin Cup and the getting-back-to-even moment that happened for many of us before Jim Cramer started talking and writing about it.

Lost Generation? Think about 1941 and the 12 years of aftermath. It was into this void of investing and the schrapnel of rampant speculation that George Nicholson helped to launch the modern investment club movement in Detroit. Because it’s about EDUCATION … and deployed understanding as a real key to the stock market — as suggested by Peter Lynch — is discovered patience and discipline.