[In 1974], the market had just hit a bottom that it would never see again. Incredible bargains were everywhere. One could have thrown darts to select investments and still earned a small fortune in the coming years. Second only to the depths of the Great Depression market bottom, there were more investment bargains than at any other time in any of our lives. The opportunity of a lifetime lay just ahead, and what was the prevailing mood on Wall Street? Sheer gloom and doom. Almost everyone seemed resigned to the market going lower amid the depressing news of the day.
There are lessons in all this, dear clients. First, great buying opportunities go unheralded, and the news is always darkest at the bottom. Second, there is normally a believable bogeyman frightening investors (such as the fear of wage-and price controls…). Third, the reality of bargain prices doesn’t set in until well after the fact (and at significantly higher prices). Lastly, don’t look for investment guidance in The New York Times—or any other newspaper.