Apocalyptic forecasts are the zombies of Wall Street. They just never die. There’s nothing like riling up the public with a prophecy of another depression. Beware, friends! A bear market of world-ending proportions is looming and if you don’t listen to what I have to say, you shall be left penniless and misery shall accompany you for the rest of your days!

The halls of finance have more than a few dodo birds prepping for the ice age. Most have been relegated to its dark corners following such a relentless bull market. Alas, the recent market crash has emboldened the prophets to come out of their hidey-holes to unleash another salvo of doom into the frightful masses.

Ahhhh; fear peddling at its best. Here’s my favorite recent example of just such a forecast:

100% risk of a 50% stock crash if Donald Trump wins the nomination.

Now that’s a sweet headline. Chalk full of buzzwords and scary as Hades. Well done, oh doomsayer, well done. *Golf clap*

I wish I had the marbles to speak with such certitude, but, alas, intellectual honesty – not to mention common sense – forbids it. Darn you Jiminy Cricket! Don’t get me wrong: all the doomsayers are doing is exploiting human nature. People want someone to tell them what to do. It’s easier. If the doom doesn’t come to pass, you have a scapegoat. We humans also tend to view those who speak with certainty more trustworthy than those who waffle.

Think of it. Who are you going to believe? A distinguished looking gentleman who says with boldness there’s a 100% chance of a crash, or the fellow who says we might, sorta, kinda, maybe will crash but it’s not likely.

Dollars to donuts the audience distrusts the second guy. Why is he hedging so much? He’s so shady! Boo! Get him off the stage. Ask that first guy what else the future holds. He’s so smart! He knows exactly what’s going to happen. Does he have a newsletter I can subscribe to? Sign me up!

While outlandish predictions are sure-fire attention grabbers, you mustn’t let them color your outlook too much. The future is rarely as bad as the pessimists pitch, nor, to be fair, is it as rosy as the optimists forecast. Temper your enthusiasm and realize the market is cyclical. Betting on doom after a 20% to 30% stock swoon is dumb. Yet that’s when the dodo birds are the most vocal. Nothing gets them all aflutter like a downturn.

I will admit my younger self fell prey to the crazed rantings of the feathered lunatics during the dark days of 2008. It was hard not to be overly pessimistic. So naturally, I missed the first leg of the market recovery. Okay, okay, I probably missed the second leg as well. Sue me. Of course, such were the troubles of my youth. Now that I’m a bona fide robotic trading ninja, such things as fear and greed don’t compute.

So next bear market, you’ll find me flush with cash ready to deploy as bargains become plentiful.

Speaking of a bear market, what if we’re on the cusp of one now? I mean, the S&P 500 is already 10% off its highs. A major weekly trendline has been broken. It’s been years since we’ve suffered so much technical damage.

Are the dodo birds finally right?

Stay tuned for my answer next week.

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