What ever happened to all the perma bears?

We all live in a yellow perma bull, yellow perma bull! Bull market in the sky with diamonds! …markets that grow so incredibly high…

All you need is bull
All you need is bull, bull

Bull is all you need

To cut the cheese, there never were any perma bears to begin with.

Yes, you read that right. No matter what you might have heard, there has never been such a thing as a perma bear. You’d better check your sources.

There are of course quite a few people using that term, as if it meant something. Those people typically fall into one of the following categories:

Perma bulls:just buy and hold the best companies forever” (at any price); these guys disappear with the next downturn never to be seen again. Some of them bought Broadcom, Worldcom and March1 on margin in the year 2000. Others had five mortgages in 2007. Yet others were all in the XIV ETF (inverse volatility)

Newbies: they are simply parroting a meme their broker, or similarly clueless friend, told them. They have no idea what they are alking about, what a perma bear or perma bull might be even in theory.

Failed short sellers, that failed because they didn’t do any real research or succumbeed due to sloppy risk management

The average retail investors have never even contemplated going short anything, although a few have dabbled in buying a few puts or selling calls to add some “Las Vegas” to their “portfolio” (of one single stock; either a 100m$ pre-revenue biotech company, or whichever stock is the most written about [Tesla, Theranos, Enron] or having appreciated the most (FANG stocks).

Normal portfolio managers in mutual funds aren’t even allowed to go short.

That leaves more or less only sophisticated and experienced investors on the short side. Most of them are hedge fund managers that already have successful investing careers behind them. Some, admittedly, might be rich brats that think “shorting the hell out of bad companies” is a better pick up line, than letting their zero maintenance dividend kings take care of themselves while going all in on hookers and E on a yacht.

Anyway, these sophisticated investors typically made their money mostly being long good investments, thus per definition can’t be perma bears. Or they are extremely good at sniffing out good clean shorts.

In any case, if they are that good at researching and investing, there is zero probability they will limit themselves to being short only, when there are so many more things to go long with less risk and less scrupulous opponents than when selling things short.

In other words, only smart people become short sellers. The idea doesn’t even occur to average people. And if it did, Joe would soon lose everything and give up, or re-emerge as first a cautious, later a raging bull (only to lose it all again of course).

The smart(ish) short sellers are smart enough to know there are two sides of every story, of every market. Hell, they are more or less the only ones who realize there are two sides.

I have yet to meet or even hear about a real perma bear, an investor who is forever and always only a seller of all things. That’t because they simply don’t exist. “Perma bear” is something n00bs and mostly perma bulls call people they don’t understand and are afraid of: investors with more money and experience than themselves that dare go against the crowd and look a little silly for a while, because they have good reasons to trust their mind more than the crowd’s blind stampeding.

It’s been a a hard bull’s night,

and I’ve been working like a bear

So, whenever you hearthey’re a perma bear,” check your and their premises. You just might pick up something important and useful.

Just remember that there are no perma bears; and experienced and knowledgeable investors who dare stick their neck out against the crowd, against CEOs, against the Fed and other authorities to reveal relevant information, put both their money and reputation on the line for no other reason that their superior vantage point allows them to identify a higher probability of making money going short than buying blindly.

Tell me that you want the kind of things,
That bulls just can’t buy,
I don’t care too much for bulls.
Bulls can’t buy me love.



  1. …or go long on gold only? In a market where the dividend yield even from established companies rarely beats inflation, how likely is any equity to be undervalued? I smell bull$…

    • Long gold works too. You know I like gold. I see gold as a way to park my money for a while without having a counterpart (well, except for needing a future buyer of course). Hopefully inflation will lift my gold boat, possibly fear will lift gold more than inflation at some point, while the assets that are already overinflated today will fall back relative to gold. At some point in the future stocks will be priced at 15x earnings instead of 45x (MAPE), and real estate at 6% yield instead of 2% (or 3x income instead of 9x).

      In any case I think my gold will be worth 3-9x in real goods at some point in the future of what it is today. Alternatively if all goes well, perhaps the world will be 3-9x as good in the future and my life will be extremely good anyway without having to have much money :D

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