On Aug. 11, Nicholas F. Brady, who served as treasury secretary during the first Bush administration, published an op-ed in the New York Times under the headline, “Every Market Collapse Is Different.” Here is Brady’s advice for investors:
“Now, what to do? I have always believed that people make money betting against the end of the world. Certainly anyone who bet against an investment in the United States in the last 50 years has been on the wrong side of the wager. Still, it was easy, even in the ‘90s, to realize that the market was drastically overpriced. It’s difficult to know now where the bottom is. Markets overrun on the downside just as they do on the upside.
“There is an old Bahamian expression: ’never mind the noise in the market, pay attention to the price of the fish.’ But how will we know what the right price is or, perhaps more important, the quality of the fish? Real progress has come from the sorry events of the last year. Accountants and corporate executives must now produce accurate figures that are consistent and clear. Investors will have more reliable information. Our economic and political system has a marvelous capacity for improvement. … [T]he nerve-racking swings in the market will continue. But the confusion will eventually clear, as it always has, and the market—and the economy—will start to make sense again.”
Economic Platitude Watch Archive:
July 25, 2002: David Gergen