I first became licensed to sell securities in 1983. Since then, I have lived through market corrections like 1987- rather than stretch it out for months on end, let's simply erase 22.3% of market capitalization in a single day. The amount lost, $1 trillion, was roughly equivalent to both the value of all of the gold in the world at that time and the total market cap of the U.S. stock market in 1970. Some saw this singular event as an opportunity; others, as Armageddon.

While living in Houston, I witnessed the collapse of the real estate market where not only unsold houses remained vacant, but entire office buildings were eerily unoccupied. We witnessed the meteoric rise of the NASDAQ only to watch it collapse under its own weight, and as the gilded towers crumbled upon their ethereal foundations and analysts and economists alike offered up their logic, no one said it better than Yogi Berra with his statement, "It gets worse faster than better quicker." In the 1990s, The NASDAQ took 415 days to climb from 2000 to 5000, but only 253 days to tumble from 5000 to 2000.
 
One of our greatest enemies is also America's greatest asset: our unfettered optimism has allowed for unprecedented surges in innovation and buoyed us to extraordinary heights, yet so often does it desert us when we are in direst need. With great disdain I have watched and read as both news commentators and individuals alike repeatedly bemoan the shocking nature of the latest crisis and decry the self-proclaimed experts because no one saw it coming. This is where our optimism becomes a threat, where it stands in our way: as long as everything seems to be going according to plan, no one heeds the bear-monger's predictions of impending collapse.
 
In Equities magazinein 2003, Sir John Templeton stated, "A scary 20% of U.S. home mortgage debt could be in danger of default." He went on to say, "Naturally, the stock market will not be rising robustly while a consumer crisis is taking place. No doubt government would be forced to take some sort of rescue action but the psychological impact would be fearsome." [1]  
 
In 2004, Pete Peterson, former chairman of the New York Federal Reserve and chairman of the Council on Foreign Relations stated "Given our $500 billion trade deficit and our anemic savings rate, we depend on an unprecedented $2 billion of foreign capital every working day. If foreign confidence were to wane, this could lead to a dreaded hard landing." That same year, Robert Rubin added "we are confronting a day of serious reckoning" and Paul Volker predicted that "we face a 75% chance of a crises within five years."[2]
 
In 2005, David Walker, then Comptroller General of the United States simply stated, "Anybody who says [we are] going to grow our way out of this problem would probably not pass math."[3]
 
As you may have concluded by now, they were right. On the other hand, they were correct regarding not only the event itself but the timing as well - raising the possibility that the worst is indeed behind us. If this is still not the case, however, at the very least the cat is out of the bag - any new cataclysmic event will be infinitely more predictable, only blindsiding those who voluntarily choose to wear blinders. The events that seemed so impossible to us so recently have come to pass, and rather than heralding a new age in finance, these events boldly renounce the erroneous assumptions on which the previous tower of wealth was so perilously balanced.
 
Out of the rubble, however, we will rise anew.
 
Those who were able to predict these events did so with great clarity, and now those who have been chosen to execute the recovery seem to be doing so with swift dexterity. It is in our nature to be optimistic, to buckle down when the going gets tough and emerge triumphant, having been made stronger for the difficulties faced. Those that survived the Great Depression did so with a more conservative approach to investing, and in the decades to come, I hope that we will look back upon these times and see it as a new era, a period of change rather than an error, or a period of excess. A period where we save more than we spend, a period where we give more than we take, and a period in which we discovered the secret to financial success is to spend what you have after you have saved rather than save what is left after you have spent.
 
Most tellingly, however, a period when we can look back at what Tug McGraw said and laugh because it was funny, rather than laugh because it was true.