I started writing the Investment Scientist newsletter in May of 2007, and I think it would be fun to review my old articles. First of all to see if I was right back then, and if I wasn’t completely right, to see what I would write differently with the benefit of hindsight.

In May, 2007, I wrote three articles. In the first one, “The Unbearable Lightness of Chinese Stocks,” I made the statement that there was a huge bubble in the Chinese equity market and investors should stay away. In fact during that time, many (American) clients wanted me to invest in Chinese stocks, so much so that they said the reason they signed up with me was they thought I would help them do that. At the time I wrote it, the Shanghai Stock Exchange Composite (SSEC) just passed 4000, now it stands at 3412. After 15 years, it is still 15% below the level at the time. I lost a few clients for steering their money away from Chinese stocks, but in retrospect, I am glad that I made the right call. 

In the second one, “What is The Best Way to Make 10% a Month in the Stock Market?” which was actually inspired by a question asked by a reader. I shared my own story as a trader to convey the idea that 10% a month can’t be a sustainable strategy if there is no barrier to entry. At the time, I was practicing Professor Joseph Piotroski’s strategy that relies on accounting data. I thought there was a barrier to entry since nobody had heard of him yet. But I was wrong, within a year or two, there were websites toting his strategy. 

My last one that month was about real estate, titled “Real Estate: Recovering or More to Lose.” Recall that 2007 was the year that the air started to leak out of the real estate bubble, but there was still a lot of talk that the real estate market would resume its straight up trajectory after a short pause. In the article, I made the call, judging by how optimistic investors still were, that the real estate correction would go on for a while. Indeed the real estate market did not bottom until 2012. This happened to be the year I bought my house in Bethesda. 

So it looks like all three of my May 2007 articles were pretty much right on target.

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