The S&P is Below 1998 Levels…Thirteen years of Nothing?

The S&P is now below 1998 levels, the year I started my hedge fund.

It is thrilling and sad at the same time.

It is thrilling that I have trounced the averages over this time period and most of my original limited partners remain partners and friends. It is sad that I can’t retire :) .

It is thrilling to have been a part of the internet mania, but sad to have been part of the ‘credit bubble’.

It is thrilling to be at the dawn of ‘Social Leverage’, but sad to see the continuing wreckage from financial leverage.

It is thrilling to be investing and trading with all the knowledge I have gained and in the prime of my investing life, but sad to have so much distrust around my industry.

It is thrilling to have so much technology around me, but sad how poorly it is being utilized by my industry.

Though the S&P is flat for 13 years, I am as fascinated by the markets as ever.

The world has shrunk in leaps and bounds, the communication tools we have today are better than ever and the costs of information have plummeted and will continue to deflate.

Marc Andreesen is super optimistic . He’s mostly right, but is not considering how the markets work, only himself. Warren Buffett is older, grumpier and wants to make sure his legacy stands by taxing everyone else thinking about being rich. The old timers are blaming the machines.

I am rejuvenated by the recent panic.

I am inspired by all the intelligent and thoughtful people on Stocktwits.

I feel responsible for all the ‘Novices’ that are signing up everyday and reaching out to learn and get mentored.

The next 13 years may see the S&P flat again and I may not be retired, but the ‘Social Leverage’ we will all see will make us much wealthier by 2024.

22 comments

  1. panative says:

    Systems are awesome,especially markets. I’m fascinated as well with their dynamics. Unfortunately I do feel that the feedback mechanisms that keep the system honest and in tack, especially for the average investor, are way out of whack. I think the machines, do have a part in making the system more variable – we’ve been seeing 500 point swings. A lot of money can be made, but a lot is lost as well, and unless you’re constantly selling and buying on an hourly basis, you’ve been losing. My hope is the system improves and stabilises, for the benefit of everyone, since most of us have skin in the game, via a 401k, a Roth, 529’s or the like.

  2. PeterK says:

    “Warren Buffett is older, grumpier and wants to make sure his legacy stands by taxing everyone else thinking about being rich.”

    You’re wrong about Warren. He invested through the ‘high tax’, regulated era. He remembers a lot of people got wealthy, the economy was 5 times stronger; and we had 40 years of no financial crisis with Wall St regulated.

    After 1980, the smart $$$ saw the destruction of the middle class, aka ‘consumers’ and the rise of ‘trust us, we’re smart’ deregulation. Plus the $100MM CEO class – Financial guys banking $100MM at a <20% tax rate!

    You weren't investing before '80; too bad for you, no one needed to consider black swan risk against the whole financial world melting down.

    But hey, if it floats your boat, save the taxes, and risk your ass on the EU and the Tea Party. You're smart and affable, and if you're lucky, you'll make millions.

    But what will the unemployed and unlucky hedge fund guys do? Heh, They won't have to worry about taxes.

  3. Ringo says:

     The stock markets maybe will see a final bottom in september. Will the Dow be 9600 points? Maybe. And maybe the last rally will start.

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  6. jadoube says:

    Can’t retire, huh? Yeah right. More like “Can’t retire on 2 mill a year yet”. Cry me a river.

  7. rossgreenspan says:

    You’ve got kids; you’re obligated to be optimistic. Admittedly, it’s contagious. I would love to see StockTwits formalize a mentorship project. Lot’s of charlatans still on the prowl.

      • Anonymous says:

        A mentorship system sounds like a very good idea, how about a post on recommended resources to begin with, such as: authors to read, websites that are informative, trading platforms that are user friendly, courses to take, etc. Any sort of rough guideline would be useful. The main reason I follow stocktwits is for the community feeling. Keep up the good work!

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  10. Mark Essel says:

    Glad and sad you’re not retired.

    Glad cause you’re still wrestling with critical value, sad because I’m certain you’d fine something else to dive into beyond markets and trading.

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