Earlier this month I shared that cash levels/negative net worth in brokerage accounts were nearing the lowest levels in history. (see post here)   The last three times levels were this low the market fell in price.

My mentor Sir John Templeton said the four most dangerous words in investing are…”It’s different this time!”

The chart below reflects something “IS DIFFERENT THIS TIME!”


The inset in the above chart reflects that Negative Net worth and margin debt are reaching levels not seen many times in history.  The last couple of times this combo took place the stock market retreated a little bit in 2000 and 2008.

Is anything different this time around? One thing that is different this time around is…if take two extreme emotional market price points, (1987 high and the 2002 lows) and draw a support/resistance line into the future, it happens to come into play where the S&P 500 is RIGHT NOW!

Is the “Averaged PE ratio” any different this time?


The above chart from Doug Short/Bruce Carman  looks at that averaged PE ratio since 1877. As you can see, if this was the only tool you could use… does the market look like a screaming bargain right now?

Some things aren’t much different now than at the 2000 and 2008 peaks, when you look at cash levels in brokerage accounts, margin debt and averaged PE ratios!  The one thing that is different this time.…a resistance line that started at the 1987 highs and the 2002 lows is now coming into play, 11 years later.

Will the results be any different this time? Do we “have to go down there? If two other things fall into place, I am going to do something different, something I haven’t done in 30 years. 

If you would like to see how I am going to play this situation, send an email to [email protected] and in the subject box enter “game plan” or click on the box below and I will send a complimentary game plan on this set up.


How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past