I have seen some posts here recently about how this is an investing environment of ‘extreme fear’, that it’s time to start taking advantage, be greedy when others are fearful, etc, etc.

Let me push back and add some perspective, even though I am mostly a bottom-up investor.

Let’s put market sentiment (fear ←—→ greed) on a -10 to + 10 scale.

Think of early 1930s, 1973-1974, 2009 as -10. Everyone hates stocks. Gloom and doom as far as the eye can see. Companies’ survival being questioned. Credit spreads extremely wide. Stock valuations are extremely low.

Think of 1929, late 1960s, 1999, 2007 as +10. ‘This time is different’, ‘New economy’, everyone giving out unsolicited stock tips and advice, including cab drivers. Credit spreads razor-thin. Stock valuations are way above average.

I have been at it professionally for 25+ years now, and have invested through the 2001-2003 and the 2008-2009 downturns. For context, I wouldn’t even put 2002 as a -10 environment.

So, with that scale in mind, where do you think we are, -10 to +10?

Hint: U.S. Junk Credit Spreads history below.