Excess Returns · Sunday, September 6, 2026
Cameron Dawson notes that unlike the 2000s, where market downturns created a generation of risk-averse investors, recent rapid market recoveries have fostered a continued appetite for speculative gains. This psychological difference, where new highs are reached much faster after corrections, fuels behaviors that resemble gambling. Dawson questions what it would take to reverse this trend, acknowledging that a protracted bear market, while painful, might be necessary for a sentiment reset.
“And that's such a huge contrast to the experience of the 2000s where of course, the big bear markets that happened there, they really did create a generation of investors who did not want to take risks.”
“And so it's the question of what would it take for this trend to move in the opposite direction. And it's something we should not be rooting for. A deeper protracted bear market is painful.”
“But it almost feels as if the longer that this goes on, the more leverage is built into the system.”