Financial crisis—time to panic?

The more things change, the more they stay the same…

1. Investors are fleeing to gold bullion as they lose faith in the stock markets and in the U.S. currency.  Gold is up 440% in just one year …read more
2. The U.S. stock market crashes nearly 50% from the previous year’s high point
3. The price of oil quadruples in a single year …read more  
4. New York City teeters on the brink of bankruptcy!  …read more  
5.  The U.S. dollar plunges in value, and even the Canadian dollar eclipses it as the U.S. reels from the debt of a foreign war it could never win …
6. The American people lose faith in their President and he’s impeached for impropriety over a scandal
7. An adversarial nation as powerful as the U.S. have nuclear weapons targeting all major American cities 

 The year?  It was 1974.
 
Think about those above issues for a moment.  Would you see more pessimism in that era or in our own? 

Greece’s debt might freak you out and Goldman Sachs could terrify you. 

But are things really worse today than they were in 1974?  Ten Goldman Sach’s couldn’t do the damage of one nuclear bomb on New York City.

There’s a saying that Ben Graham, Buffett’s former professor at Columbia University enjoyed waxing:  Plus ça change, plus c’est la même chose 

It means, the more things change, the more they stay the same.

And here’s another wise “Grahamism”:  You pay a high price in the stock market for a rosy consensus. Uncertainty and fear will give us great stock prices, hopefully for years to come. 

What about retirees?  If they’re responsibly allocated, they won’t have a high exposure to the stock market.  Nobody in their golden years should, unless they’re keeping equity investments to bequeath to the next generation.

Are things worse today than they were in 1974?

What do you think?