Stocks were hammered today in large part, according to the media, due to comments made by “Bond King” Bill Gross in his latest newsletter. Gross warned of a “financial tsunami” and suggested a looming bear market in virtually every investable asset class over the next few years.
What the major media forgot to include was that exactly six years ago Gross issued a nearly identical warning aimed specifically at the stock market. In September 2002, he posited that the Dow Jones Industrial Average would lose another forty percent (after it had already declined nearly thirty percent from its internet bubble highs) on its way to 5,000.
That prediction proved about as wrong-headed as they get as stocks (as measured by the Dow) bottomed within a month’s time and went on to nearly double over the next six years.
Ironically, Gross began his September 2002 letter by writing, “okay, so what’s a bond guy doing talking about the stock market again? Shouldn’t he stick to his ‘knitting?'”
But here’s an even better one: “has Mr. Gross unwittingly called a bottom once again?”
One elite trader is betting so…
U.S. Stocks Slump, Posting Longest Losing Streak Since January
September 4, 2008