The Broken Clock Investor: Always Warning, Rarely Winning

Dear Mr. Market:

One of our favorite recurring themes here at Dear Mr. Market is what we like to call the “Broken Clock Club” — the group of perma-bears, doomcasters, and media pundits who reliably forecast financial catastrophe year after year. Like a broken clock, they’re eventually right… but for all the wrong reasons and far too late to be of any use to investors.

Let’s rewind to December 2023. Headlines were ablaze with bold predictions of economic calamity. Chief among them was the infamous economist Harry Dent, who warned of a 1929-style market crash hitting in early 2024. (click here to review that article that grabbed a lot of nervous eyeballs back then). Dent’s call wasn’t exactly an outlier; it echoed a chorus of dire predictions centered on Fed policy, inflation hangovers, geopolitical instability, commercial real estate defaults, and consumer weakness.

Yet here we are, approaching mid-2025, with the S&P 500 not only above its December 2023 levels, but clawing its way back and approaching highs throughout the first half of this year. What gives?

Read more: The Broken Clock Investor: Always Warning, Rarely Winning

The Mood Versus the Market

Let’s talk sentiment. One of the most telling indicators of market psychology is the AAII (American Association of Individual Investors) Sentiment Survey. Back on April 2, 2025, the survey registered a massive bearish sentiment reading of 61.9% — a level that historically coincides with deep pessimism and often, paradoxically, strong forward returns. Since that high-water mark of fear, the S&P 500 has shrugged off the concerns and continued its upward climb.

This shouldn’t surprise seasoned investors. Sentiment is a notoriously unreliable predictor of market direction in the short term, but it serves as an excellent contrarian indicator. When everyone is scared, most of the bad news is already priced in. And as history repeatedly shows, some of the best rallies emerge from the shadow of peak pessimism.

Why the Broken Clocks Keep Ticking

Doom-and-gloom calls often rely on logical-sounding arguments rooted in economic data, but markets are forward-looking and dynamic. They adapt. Policymakers adjust. Consumers adjust. And most importantly, investors allocate capital based on expected future conditions, not current headlines.

What Should Investors Do Instead?

This is not to suggest that risks don’t exist — they always do. Prudent risk management, diversification, and strategic planning are essential. But timing markets based on fear-based headlines or emotionally charged punditry is a recipe for long-term underperformance.

Instead, focus on fundamentals, maintain a disciplined investment strategy, and remember that market cycles are part of the journey. Let the broken clocks do their thing — loudly and publicly — while you stay focused on building wealth steadily, silently, and smartly.

📉 Permabear Hall of Fame

A closer look at the prophets of perpetual doom… and the market that keeps proving them wrong.

If there’s one thing more consistent than market volatility, it’s the media parade of permabears — the pundits who predict crashes year after year and rarely, if ever, get it right. Some made their names with one prescient call and have coasted ever since. Others have become broken records in the bear market choir. Here’s our Permabear Hall of Fame:

🕰️ Harry Dent – The Perennial Crash Predictor

• Claim to fame: Best-selling author who has been warning of a “massive crash” for over a decade.
• Recent call: In late 2023, he forecasted the “biggest crash of our lifetime,” saying markets could fall 80–90%.
• Reality: The S&P 500 has gained significantly since that call, with markets hitting new highs in 2025.

🪙 Peter Schiff – Gold Bug and Fed Critic Extraordinaire

• Ongoing theme: Hyperinflation is coming, the dollar will collapse, and the Fed is destroying the economy.
• Media presence: Regular guest on business networks despite a decade of missed market gains.
• Track record: Predicted crashes nearly every year since the Great Financial Crisis.
• Missed: The entire bull market from 2009–2021 and the 2023–2025 rally.

🧮 John Hussman – Valuation Maximalist

• Approach: Mathematical valuation models suggesting equities are wildly overpriced.
• Bearish since: 2012 — and vocal throughout the longest bull market in U.S. history.
• Outcome: His flagship fund significantly underperformed due to persistent short and hedge positions.

🏚️ Michael Burry – The One-Hit Wonder?

• Famous for: Correctly predicting the 2008 housing collapse.
• Since then:
  • Shorted Tesla, ARKK, and the S&P in recent years — all rebounded.
  • In 2023, made huge put bets… and the S&P gained over 20%.
• Lesson: Even genius calls don’t guarantee a reliable forecast track record.

🪦 Marc Faber (“Dr. Doom”) – The Market Obituary Writer

• Claims: U.S. equities are in a massive bubble; collapse is imminent.
• Notable prediction: “A 1987-style crash is coming” — first said in 2011… and repeatedly ever since.
• Results: The market has more than doubled since many of his loudest calls.

📚 Jim Rickards – The Collapse Narrative Machine

• Books: The Death of Money, Aftermath, and others with bleak economic scenarios.
• Themes: Dollar collapse, central bank failure, and gold at $10,000.
• Performance: Predictions remain theoretical — gold is up, but far from doomsday pricing.

📊 The Bigger Picture

These figures often attract attention not because they’re accurate, but because fear sells. Investors drawn to their dire forecasts frequently miss out on the compounding growth of equity markets over time. Instead of preparing for “the big one,” many would have done better simply staying invested and ignoring the noise.

Final Thought

To paraphrase Warren Buffett: Be fearful when others are greedy, and greedy when others are fearful. And when bearish sentiment spikes to 61.9% while the market climbs higher? That’s your cue to keep calm, carry on, and maybe even turn up the volume on your long-term allocation — not the financial noise.