When Out Of Sync Bang Em Out, Start Over

Even I don’t remember the backdrop for such profound asset destruction. I was running hedge fund capital, but 

don’t recall making serious money on the short side, either. 

Sold out my Polaroid and Xerox longs, but didn’t turn around and short them to death. Such asset destruction explains the retreat into collectibles and gold. Nowadays purchasing is up for gold. Early eighties my purchase of 1200 square feet in Trump Towers for over 1 million pretty much called the top in collectibles for several years.Such a time of galloping inflation enveloped the stock market, which didn’t rise convincingly until after the deep recession of 1982. 

Today, no Nvidia, just 50% long consider me a scared dumb bunny. I see the world as a powder keg, likely to explode while the city sleeps. All such reminds me of 1940, the early days of World War II when Churchill and Hitler faced off after France agreed to an armistice with the Nazis. Churchill bombed the French battleships holed up in North African ports. Over a thousand innocent French sailors went down to the depths while heaved-to in port.

How’s that for being in the wrong place at the wrong time? Well, over a year ago I missed the turnaround in bank stocks, but did catch Goldman Sachs, a play on trading and deal making. JP Morgan was a layup and even Citigroup rallied big time. Basically, the market’s upside volatility largely escaped me. I was mired in 

stodgy paper like General Motors while my MLP plays sagged on easing quotes for oil. 

For years, our contemporary art collection spearheaded our wealth. I was present,  early fifties when New York became the center for Abstract Expressionism. Canvases that sold in 1954 for 1,000 bucks now go for over a hundred million. Yes! Hundred Million!

I’m talking about Jackson Pollock, Rothko, Warhol and the kid who was chalking up subway cars,  Basquiat. He taught me what it was like, growing up, young and black in New York. 

I was making 100 bucks, weekly, as a copy editor, but I bought my contemporaries for $300 apiece, and paid for said canvases at $25 monthly. David Rockefeller and Peggy Guggenheim were told by their mentors to buy Pollocks and Rothkos. And they did so. 

Years later, when my offices were in David Rockefeller’s 

building on Park Avenue he gave me permission to roam his halls and take in the lavish spread of contemporary art on his walls. Everyone there giggled at his nutty collection, but decades later bowed their heads in awe.   The art was worth more than the building, which was riddled with asbestos. 

Equivalent today in the stock market would be early on ownership of Microsoft, Amazon and Alphabet. I own low cost Microsoft, but missed Nvidia and its ilk. Nobody’s perfect. I sense a 15% haircut coming in the contemporary art auctions at Sotheby’s and Christie’s. 

I’m sure nobody but me remember the market peaking in the mid-sixties and then starting its precipitous decline approximating 60% by the early eighties.

There’s nobody to protect investors from poorly conceived operating companies. Nobody goes to jail for working stupid in the investment world. You just lose all your money. Not just equity but bond capital as well. 

What struck me between the eyes was the duration of bear markets. We are talking decades , not a here today gone tomorrow experience. 

Each generation concocts its own silliness.  Harold Geneen even failed with all his 18-hour days. It’s impossible to run a company with dozens of profit centers. 

How profoundly short-changed investors fared for decades is picked up by this chart on dividends related to 

GDP.