I happened to glance at the stock market averages today and couldn't help remembering Paul's Chicken Little screed shortly after the election.
His anger and confusion over the president's re-election led him to attribute an 800 point Dow correction exclusively to the fact that Romney lost, and of course, Wall Street favored Romney.
Of course it did. But despite Paul's na´ve pronouncements and shoddy math, things have gone rather well since then, proving the folly of basing investment decisions on short-term predictions, even by those who have some credentials in the field. For the record, as of 2:00 on April 10, the Dow stands at 14,820 and the S&P 500 shows 1,588. These represent increases of 4.5% and 1.5%, respectively, over the closes on October 9, 2007, when both indexes set record highs before the Bush crash.
Paul called what happened after the election a "haircut." The hair seems to have grown back nicely, at least for investors. The economy is still hurting for the same reasons I mentioned throughout this string. Companies still hoard cash because they don't trust Wall Street, and because they've learned to do more with less. Americans, for their part, are generally not being trained or retrained in the skills that will be necessary to succeed in the new economy. The sequester has made all these problems even worse.
Could the markets tank again tomorrow? Of course they could. Instead of trying to predict things like that, I prefer to stay diversified enough to easily withstand whatever comes along.