Investors Saying Bosh to the Bears
With the Dow Jones industrials on the brink of 10,000, you might think this would be a period of celebration and congratulation. But no. The gloomy financial pundit class is issuing more ultimatums than NATO and heaping scorn on those poor saps who have sextupled their money in America Online Inc.</br></br>The truth is, small investors have been right for the past five years. When stocks fell sharply in October 1997 and again during the summer of 1998, many pros panicked, but the little guys held their ground.</br></br>Still, the theme emerging in the press on the eve of quintuple digits is that dimwitted investors have forgotten the past. "After several years in which stocks do better than their long-term average- -as they have in the 1990s--there is a better-than-even chance that they'll underperform over the subsequent several years," wrote Mark Hulbert last week in the New York Times.</br></br>Hulbert quoted two economics professors, John Campbell of Harvard and Robert Shiller of Yale, as saying that stocks will drop by one- third--or worse.</br></br>But don't panic just yet. Campbell and Shiller have been bearish for a long time. It was Shiller who issued the influential dire warning at a Federal Reserve Board meeting in 1996 just before Chairman Alan Greenspan's "irrational exuberance" speech--with the Dow at 6437.