Two Contrarian Trades for the Coming Decade

The last time Nicholas Vardy was a guest blogger he generated quite a buzz with his article and the comments that followed. This article should do the same, but you'll have to read on and let your thoughts and opinions be heard. After you read the article and comment, please visit Nicholas's site (Global Stock Investor) to read more articles and opinions from him.


U.S stock markets have just come off of their worst decade ever, with inflation-adjusted returns in the S&P 500 dropping as much as 30%. That's a far cry from what investors were expecting at the turn of the millennium. The Internet was creating paper billionaires overnight.

Fast forward 10 years, and Nasdaq is still 40% below its peak. In addition, the Pew Research Center just designated the past decade as the "worst in 50 years."

But just as there was a technology bubble in 2000, today there is also a strong "pessimism bubble" about the U.S. economy over the coming decade. And like all bubbles, this one will eventually pop – as will the rising China bubble.  Understanding this is the key to ensuring you don’t end up like investors who have spent the last decade waiting for Cisco to "get back up to $80."

Rarely has the global stature of the United States been lower than it is today. A recent Washington Post/ABC poll found that 61% of the American people think the United States is in long-term decline. In another poll, 44% of Americans said that China was the top economic dog in the world, compared with only 27% favoring the United States.

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