Image Source: PexelsThe crash callers and bears just got a major lesson.It’s a lesson that all investors have to learn at some point. Indeed, the only investors who actually make money from the markets are those who have learned that lesson and integrated its outcomes to their investing strategies.The lesson?Bears don’t make money.The reality is that being a bear provides you with endless material to write or complain about. After all, at any point in time there are a million things that can go wrong in the markets. But most of the time, as in over 95% of the time, those terrible things don’t actually play out.Even when bad things do play out, few if any investors actually make money from them.Consider the Great Financial Crisis of 2008: arguably the greatest bear market/ crisis of our lifetimes.In 2008, there were roughly 216 million American adults over the age of 18. Roughly 60% of them had exposure to the stock market via brokerage accounts or retirements accounts (401Ks, IRAs, etc.) So, we’re talking about roughly 130 MILLION people who were involved in the stock market in one way or another.The number of investors who got rich betting on a crash at that time is under 30. So, we’re talking about 30 people out of 130 MILLION succeeding. That’s roughly one ten millionth of one percent (0.00001%).To put that into perspective, you are TEN TIMES more likely to be struck by lightning (the odds of that happening are one in one million).Moreover, those few investors who DID get rich from the Great Financial Crises were all in highly unusual circumstances, none of which apply to the typical trader/ individual investor.John Paulson is a famous hedge fund manager who became a billionaire betting on the housing crash. What you might not know is that the only reason this happened was because he personally had Goldman Sachs build securities that were chock full of garbage mortgages, which Goldman Sachs then sold to other clients… so Paulson could bet against them.This was unethical and borderline illegal. And individual investors like you or I would NEVER have this opportunity (when was the last time you told Goldman Sachs to create something for you to bet against?)Michael Burry is another hedge fund manager who got rich from betting on the housing crash. He had to LOSE money for two years before his bets worked out. And even once things went in his favor, the investment banks who sold him the securities he used to bet against the housing market refused to value his trades as profitable. Then his investors tried to withdraw their funds. When Burry refused to give the money back, they sued him. What followed was years of legal hell as well as an investigation by the FBI.So let us consider this…
Again, being a bear is great if you want something to complain about… but it’s terrible if you want to make money from the markets.More By This Author:Are the Lows In? Is The Top In For Stocks? These Are The Two Charts You Need To See Today