Jim wrote: I take the lesson: when someone with a reputation (deserved or not) of being a permabear makes a bullish call, it's probably not a bad call.

If/when I'm aware of their bullish call I most definitely am more inclined to pay attention.

Economist Article stated: TEN years ago, GMO, an American fund-management group, was losing clients. GMO was sceptical about the dotcom boom and thought that equities offered poor value. Its performance lagged that of other groups who appeared to be more in tune with the “new paradigm” of the late 1990s.

The stock market is bullish 70% of the time no matter how you slice it. The problem I have with those who lean toward being a Permabear is that many individual investors listen to them and remain out of the market, or invested in asset classes that significantly underperform the market. The American economy, and by extension, the stock market keeps pressing forward while they remain at the station fearing to get on the train.

I'm with Warren Buffet on this. Here are a few of his quotes:

I bought my first stock in 1942, in the summer of '42. I was 11 years old. And so 75 years have gone by. And I have never known what the market's going to do the next day. And that's not my game. My game is to decide whether I'm in the right economy, which America's definitely been ever since that time. The Dow has gone from 100 to 21,000 during that time. And no matter what the headlines say, or terrible things are happening - we were losing the war in the Pacific when I first bought stocks.

It’s always been a mistake to bet against America, since 1776.

And those who are continuously spouting off about the market being over-valued and stocks being a huge risk are doing just that!

Of course, I'm a strong believer in identifying periods of time when risk is high and it is best to be defensive. It is very, very hard to recoup a fifty percent drop in one's portfolio! But this warning comes around rarely. Certainly no more than 30% of the time, not 100% as many of these prognosticators tend to be!