I don’t like to brag, but …

OK … Let’s be honest. I do like to brag. The problem is that I just don’t get enough opportunities. But I think I might have another one.

In July of last year, I predicted the oil price bottom to about a day. (Predicting) I didn’t do quite so well on stocks and real estate a little later in 2008 (We’re Not at the Bottom). I called an absolute bottom on real estate that turned out to be way off the mark. But I did call some temporary moves in the stock market correctly, even though the slaughter has been worse than I expected there too.

But three weeks ago, I wrote, “Buy stocks and real estate. They’re cheap now …”

After that was written, headlines screamed that home prices had dropped again. (“The numbers were the worst on record.” Robert Shiller, co-creator of the Case-Shiller index and professor of economics at Yale University.) But my prediction was in mid-March and the statistics were for January. We’ll have to wait a few more months to see if March actually was a bottom for real estate prices. Real estate unit volume has already rebounded and is headed up.

We get instant data for stocks, however, and we can see exactly what has happened since then. The chart above shows the story. I was four days late calling the bottom this time.

Let there be no mistake. I see another stock market crash in the future when the shock of “two” in the “one-two depression-inflation” punch kicks in. But after that, people will realize that stocks and real estate actually do represent ownership of an asset and they will rise on an inflationary sea like boats on the tide. Financial reforms now being enacted will prevent ‘non-owner’ corporate executives from stealing ‘owner’ stockholders blind … like they’ve been doing for the past twenty years or so … and will help make stock ownership more real and valuable.

The big area where you might conclude that my predictions were completely wrong is inflation. Inflation has been low and remains low right now, primarily due to almost invisible demand. Shocked by the Bush Depression … an economic climate most people haven’t seen in their whole life … people are saving their money and simply refusing to spend for the first time in generations. But my hyper-inflation prediction has always been long term based the vast expansion of the money supply and the loss of productive capacity. (Where will auto prices go after GM and Chrysler fold their tents and disappear into the night?) I have always viewed the low inflation we’re seeing right now as temporary. It’s like the recoil after you hit a big solid object in a car.

I say again, “Buy stocks and real estate. They’re cheap now.”