In those days we had Faraway House. The 1920s-era cottage hugged the banks of the Credit River. A kilometer-long killer driveway snaked and plunged through a property we shared with deer and wolves. It was an hour from the Big Smoke and yet, oh so far away. Loved it.
On NY Eve we spent time looking through the windows at the dark river water streaming past. The dog was calm. Dorothy, not so much. She wouldn’t be surprised, she offered, if the lights went out after midnight. And then this bucolic, wild patch would be truly remote and threatening.
It was December 31st, 1999.
My friend and noted newspaper columnist Jon Chevreau had written a book with advisor Stephen Gadsen about what was going to happen. It was called “Krash. How Y2K could sink the stock market and what Canadians can do about it.”
I told Chevreau he was nuts. But the Y2K scare was palpable, widespread and consequential. Nobody had been through a digital turn-of-the-century before and the fear spread that computers – which were rapidly dominating life – would fritz.
This was the book’s pitch:
What will happen on January 1, 2000, 00:01? Will we be left in the dark? Will we be left without phones? Will we be left without access to our money via credit and debit cards and ATMs?Not likely, say authors Stephen Gadsden and Jonathan Chevreau. But what is likely to happen is that as early as September 1999 or as late as 2001, our overly bullish stock markets in North America will come krashing down around us!
No one disputes that the current stock markets are vastly overvalued. As the Dow reaches unprecedented levels, many ask how much higher can it go. Some are unwilling to believe that this crest will peak. Others, especially those nearing retirement, want to make the most of the market. While the authors empathize with these sentiments, they cannot ignore history.
In Krash! they show that all the signs are there for a significant market correction – just as they were in 1929 and October 1987. But all is not lost! This book gives investors a few weeks or months head start in preparing for the inevitable.
By the way, in late 1999 the Dow sat at 10,500, after gaining about a thousand points that year. No crash came. The market gained a thousand points in January (but finished the year flat). Life went on. Toronto house prices increased 6.5% during 2000 (to an average of $243,500). George Bush was elected. The Reform Pary dissolved. “The Canadian economy has fared surprisingly well over the past year,” Bank of Canada boss Gordon Thiessen said in a major speech. Boring.
Looking back, Y2K seems naïve, quaint and childish. It turned out to be a wholly-manufactured crisis, embraced by the gullible, like my journalist pal. Unknown is how many people were scared into going to cash, and the price they may have paid for staying out of a market that today sits at 42,500. The story has been told time and again on this pathetic blog, and amplified by my suspender-snapping peppy portfolio manager colleagues. This is what happens when emotion slops over onto your portfolio. A mess ensues. Nobody, it seems, ever made a good investment decision based on greed or fear. Of those, the latter is strongest. It makes people weird. But it sells books, and brings clicks.
Is Trump the new Y2K?
Now we count down to January 20th, the day 45 becomes 47 and the moment he’s vowed to drop a slew of executive orders, including Godzilla-sized tariffs on Canada. So far we’ve brought you the conclusions of economists – recession, unemployment, deficits, rate changes and mayhem. The Trumpers say this is necessary pain to rid the world of dangerous wokeism. We know best, they add, how society should be reoriented. They also claim, ‘it’s just Trump’ and he’s scaring the crap out of people merely to get his way. The art of the deal. How to win, by making others lose.
In any case, 2025 will be the year of the orange guy. He may whack us. He may only mock us. He may set the world alight. He might diffuse it. He is deeply unpredictable.
We’ve been here before, of course. Nine Eleven. The credit crisis. Weather bombs. Covid. Lehman. Y2K. The investment landscape is littered with the broken detritus of generational calamities that turned out to be junk. Those who ignored them did fine. Those who panicked, paid.
This will be a troubling year. The river and the wolves won’t care.
About the picture: “Garth…. If you can use this photo of Aspen and Finley on the day that you hit one million comments I will donate two hundred dollars to the local SPCA in your name,” offers Ron. “I will post the paperwork showing your generous contribution in the comments section. If you don’t use the photo I will still make the contribution and I will still make it in your name.”
To be in touch or send a photo of your beast, email to ‘[email protected]’.
