'Reputable' Investing Newsletter To Millennials: "If You Do Not Have 100% In Equities, You Are Crazy"

Tyler Durden's picture

Earlier today, MarketWatch highlighted the rather blunt investing advice that the 'highly reputable' investing newsletter, The Prudent Speculator, and its editor, John Buckingham, recently offered up to millennial investors:

“If you are 50 or younger, or have 10 years before taking money out, and do not have 100% in equities, you are crazy.”

And while we can certainly appreciate his attempt to achieve crystal clarity with his terse investing advice, the underlying message (i.e. put all of your money in equities right now or you're a complete idiot) strikes us as slightly less than "prudent" and bordering more on "completely moronic" end of the spectrum.  That said, we can understand that "The Completely Moronic Speculator" probably doesn't have the kind of market appeal that Buckingham was shooting for.

Before we dive into the details of Buckingham's justification for his rendition of the "Buy The Fucking Dip" strategy, we thought it would be 'prudent' to provide some historical context for his controversial call.  His underlying premise is very simply that if you invested money in equities in 1927 you would have achieved average annualized returns of ~10% through 12/31/16.  And, since it worked in the past, it will necessarily work for those looking to put money to work today as well. 

To summarize, here is visual representation of Buckingham's investing call for millennials:

Prudent Spec

 

And, here is his mathematical justification...a list of average annual returns by asset class from June 30, 1927, through Dec. 31, 2016.  You know, because past returns are always a perfect indicator of future performance...just ask AOL, Pets.com, eToys.com or any of the other tech giants that achieved multi-million dollar valuations in 2000 and then promptly filed for bankruptcy a year later.

Prudent Speculator

 

The S&P chart below perfectly illustrates why Buckingham's 'research' is misleading, in the best case scenario, or simply moronic, in the worst.  As you can see, all the 'spectacular' 85+ year returns of the S&P were delivered between 1980 and 2000 when the market returned an average of nearly 14% per annum.  Returns from other periods, 2.55% from 1928-1980 and 2.45% from 2000-2017, have only served to dilute the 'returns' generated by America's first epic stock bubble. 

Prudent Spec

 

Moreover, it's important to note that if you decided to take Buckingham's advice the last time the S&P traded at bubbly multiples similar to today's levels (i.e. 1/1/2000), and held your position for 10 years (again, per his guidance), a $10,000 investment on 1/1/2000 would have turned into a whopping $7,590 on 1/1/2010...

But sure, if you don't buy stocks right now, with earnings multiples at 1929 levels, then "you are crazy."

CAPE

Millennial

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johngaltfla's picture

I have better advice. All you loser millenials send me your money and I'll use it to corner the silver market and then you can all die penniless or in a FEMA camp.

cossack55's picture

Well, I'm over 50, have zilch in equities and fuck you Buck

Jim Sampson's picture

OT but just wanted to tell everyone that someone I know has decided to start buying physical Silver...  I am so happy for him!!!

jcaz's picture

LOL- guys like this, you can just see it in their fair, delicate features-  little teenie weenie,  desperate to compensate via "macho" market calls;

Thanks, Beeker-  go back to The Muppets, your scene is almost on......

nope-1004's picture

Fricken dudes' face is almost as big as the financial bubble.  Looks like he just walked by a bakery.

No wonder he's an advocate for zero self control to others.

 

loveyajimbo's picture

That pig never walked BY a bakery in his life.

yomutti2's picture

Actually, it's good advice. If a 20-something snowflake loses 50% in the next washout, it will teach him a lesson that he'll never forget.

 

The_Juggernaut's picture

He couldn't have a worse track record than the stackers on ZH.

lmfao!

aminorex's picture

I am 100% in metals and cryptourrency.  I am crazy: crazy rich.

techpriest's picture

I think someone must need to sell very, very badly.

Supafly's picture

That, or we need to re-elect Reagan. 

TeethVillage88s's picture

We did see Exhuming MCCarthy in 2016 with the Presidential Election.

Was Trump a Reagan or Pat Buchannon.

What the hell we never did it before. let's try it. Let's put Ronald Reagan's Tomb in the Whitehouse and try that as a fight against US Congress.

FinsterF's picture

He could do better than the last few even in his present condition.

Giant Meteor's picture

Gee, I wonder if his advisement has anything to do with this ?

"They Know Something That We Don't" – Corporate Insiders Are Dumping Their Stocks "At Levels Rarely Seen"

"As the investing public has continued to devour stocks, sending all three major indexes to record highs in the last few months, corporate insiders have been offloading shares to an extent not seen in seven years. Selling totaled $10 billion in March, according to data compiled by Trim Tabs." Zero Hedge, from this morning, one page over ..

Then,

The Prudent Speculator,  John Buckingham says, “If you are 50 or younger, or have 10 years before taking money out, and do not have 100% in equities, you are crazy.”

John "porky the pig" Buckingham, needs to go straight to the top of the pitchforks, and lamp post list when this shit blows  ..

 

 

laser's picture

A millenial may need 40 years to get even after the next crash.

aurum4040's picture

The problem is that equities have value and, like it or not, US equities are the most valuable and sought after in the world - by far. When the next crash occurs, it will begin in Europe, move to Japan, and finally the US. The Euro will be finished as will the Yen. US treasuries will not be a safe haven - they will be liquidated. Both the Euroland and Japan have more money they know what do with. Trillions upon trillions are in UST'S. More money will have to be moved that has ever been moved in the history of the world in such a short span. It will dwarf the 08 crash. Where will the money go? Gold, yes. Silver, yes. But there isn't enough gold and silver in the world to satisfy demand. Not in physical terms and not in paper terms. We are talking trillions of dollars. Both gold and silver are illiquid in comparison to equities. So where will most of the money go?- US equities - solid companies with infrastructure, with hard assets, with hard tech. After an enormous pullback, we will witness the greatest stock rally in the history of mankind. The Dow will hit 35 to 40k. Perhaps more. Central Banks will print more money and also buy. It will be the grand revaluation - PEs won't matter what will matter is the amount of money NOT in US treasuries. The world will not end. It will go on. And if you do not own the most valuable securities on this Earth you will be left behind, holding a bag of shit. Buy some gold, buy some silver, buy some land and buy a ton of stocks during the 'armageddon' - it's the path of least resistance. And if you don't own Ether buy NOW.  

Mr Pink's picture

poor bastard....he will die of a broken heart like the rest of us

swampmanlives's picture

Well, if you can get buy on what you have know, then kudos to you. But, if you're over 50, then you've survived at least three terrible markets crashes, with each recovering at some point, so don't you look back and think "man, if I invested in stocks way back, I'd be loaded, even if I bought at the peaks! "

serotonindumptruck's picture

Some millenials would prefer to crack you over the head with a bicycle lock.

TeethVillage88s's picture

We all gitten obama phones, EBT cards, and money from George Soros. I'm gonna move up to manager with a group of protestors!

$15 dollars a hour to start.

johngaltfla's picture

Never bring a bike lock to a gunfight.

swampmanlives's picture

Have you beaten the S&P 500 buying and selling gold and silver all these years?

yogibear's picture

Debt holders, add to that bag holders.

Bigly's picture

Someone really needs that pump and dump bonus.

I smell the froth, don't you?

nmewn's picture

The next big thing...Fyre Festival derivatives! ;-)

johngaltfla's picture

Now that's f'in #FyreFunny

TeethVillage88s's picture

Smell like the sea, fish, or bacteria.

I think it is the bacteria you always smell.

WTFUD's picture

Stalactite tears!

Many a tear has to fall but it's all in the Game.

saldulilem's picture

Ahahahahahaha  .... 100%....  in ....  ahahahaha !

Bernie Madolf's picture

LOL

This guy is quite a comedian

TeethVillage88s's picture

Yeah... I have been slumming on Equities and not hedging. It costs money to hedge, right? Special account with commodity and futures privileges?

"Was stealing we I shoulda been buying a hedge"

Get a High Yeild Bond ETF, you look at last two years, end of 2015, start of 2016, you never recovered price/principal that you put in 2 years ago.

OR YOU CAN TRY ONE OF THESE NEW STRATEGIES IF YOU DON'T LIKE BUY AND HOLD:

- Momentum Trading
- Distressed Stocks
- Options Day Trading or buy Inverse ETFs?
- Options Trading?
- Commodities coming back when Globalism Ends?
- Futures in Food Crops, Food crop Bubble, Ag Bubble?
- Speculation in Oil Prices?
- Shorting DB, CS, Chinese Corps, Greece, Spain, Italy, Portugal?
- Algo Trading?
- Day Trading

Yeah, use your candlestick charts/stock charts... tell me what you are doing and how you are doing it.

I don't think I have the patience for any of these strategies.

indygo55's picture

OK so,,, let me see if I got this right. You are listing out mainstream trading ideas on Zero Hedge like it's so special? On Zero Hedge?

TeethVillage88s's picture

Yeah, why did I do that when obviously no one else ever does that?

I probably troll for the new guys.

It is nice to see normal writing, and normal feelings.

No S/

Yen Cross's picture

 I think he[Buckingham] means in "nominal terms"?  </sarc>

TeethVillage88s's picture

Perhaps he is a market timer.

He looks at the starting period where it was low and starts counting to the high price. S/

I understand there is no way to time the market.

NoPension's picture

Plastics. The future is in plastics.

Helix6's picture

What will be truly interesting is to see whether the stock market delivers the same returns when an economy is self-destructing as it did when it was kicking ass.

TeethVillage88s's picture

The counter point is that under Globalism starting from 1971, Nixon Shock, Petro Dollar with Military Forces to back it up, Deregulation of Borders, Markets, Labor, Debt, Investments, Tax Jurisdiction, Currency Exchange, Currency Wars, Inter-Dependence of CHINA, USA, EU, everyone else...

THEN they have controlled all the Treaties, Trade Law, Property Law, Tech Transfer to the East, Slave Labor in Latin America, ME, East Europe, Asia, India, Africa...

AND they control G20 pretty good in a crisis according to Jim Rickards...

Could be they really are holding everything in a Caste System with dependent Currencies and Markets.

Great Briton should have Imploded after WWII, but they commoditized Housing and put a bubble in the Rents... and the Damn UK is still going, and there are no Jobs, the people are idiots and are not educated... but it is the future of the USA.

Maybe they won't crash EU & USA.

Dragon HAwk's picture

Funny how if a stock is doing poorly they drop it from the Index, they never mention that..

serotonindumptruck's picture

OTC and penny stocks to the moon, Alice!

swampmanlives's picture

Then buy a total market ETF

saldulilem's picture

Huh, I didn't know Wayne Knight was into investing.

hawaiian waverider's picture

Millenials have prefected blaming others for their shortcomings and not taking any responsibility themselves.  Thanks for being the scapegoat Mr. Buckingham on this one.

flyonmywall's picture

If millennials actually had any money for investing, and money to buy investing letters, it might work.

Seems perfectly clear that when you see "buy stawks" advice on fucking Facebook, or you see drivel like "invest 100% in stawks", that the top is in. 

When your shoeshiner or millennial apartment slumlord starts peddling stock advice, you know it's time to get the fuck out.

Keep stackin' bitchez.

 

Bureau of compliance's picture

100% in Pokemon.                                             

https://www.youtube.com/watch?v=hFoey3d4qSs

directaction's picture

Quick Poll. Which is preferable:
<--- Being fisted.
<--- Being 100% in stocks now.

The Navigator's picture

Kinda seems like the same thing, either way you're fucked.

indygo55's picture

Something tells me this guy John Buckingham is going to be one of the first to receive social justice.