HEAR THAT GROWL?

By Daniel Kadlec

Before this is over, we're all going to lose our shirts. You. Me. The cabbie talking about his mutual funds. The guy behind the deli counter reading Barron's. My "fully invested" barber. The suits on Wall Street. They can afford it. But oh, yes, they'll pay too. We're all floating on the same bubble.

There's no telling when, of course. We might see Dow 8000, 9000 and 10,000 before the next sharp market decline--the dreaded bear market. Incredibly, the current blistering pace would roll the Dow past those milestones by year's end. How far is up? That question is relevant only to those able to spot the market's top and get out before the herd--which is to say it is relevant to no one because while some may get lucky, no such expert exists.

So when the market finally blows, you can be sure it'll take the clothes off our backs. The only way to hang onto your threads is to lighten up on stocks now and sell a little more every time the Dow notches a few hundred points higher. That's heresy in today's stock-crazed world. It could mean missing the better part of a huge rally still to come. So no one is going to do it. Heck, we're still throwing $20 billion a month into stock mutual funds. The inflows haven't even slowed, much less stopped, much less reversed. But the only other choice is to be led to the slaughter. And we are being led.

The people who shepherd our money--analysts, brokers, money managers--rarely say it's time to get out of stocks. That's not how they put caviar on the table. Their job is to set a target and, after it's reached, set it higher. For them it pays to snort like a bull even when they feel like a bear. Take Barton Biggs, the well-regarded global strategist for Morgan Stanley. He warns that "stocks almost everywhere are at record valuations, euphoria is epidemic and the bull market cycle has got to be long in the tooth." Yet he says buy more stocks.

Abby Cohen, the closely watched market guru at Goldman Sachs, has become mildly unnerved by the Dow's 10% rise in recent weeks--a gain she had expected would take all year. But she's raising her target anyway. Ralph Acampora, a veteran at Prudential Securities, two years ago predicted the move to 7000. Now that it's happened, his new target is 8250. And once we get there? On to 10,000, natch. Meanwhile, pundits who do make a bear stand don't last. Elaine Garzarelli, known for her 1987 warning, issued another late last summer but has already recanted. You can be sure that when this bull market finally ends there won't be anyone sounding an alarm. If you expect a savior, you're doomed.

If you have time, the way to beat the system is to forget what's going to happen: keep buying and resist the urge to sell when prices eventually tumble. With baby boomers saving for retirement, odds are stocks will go much higher over the next 20 years. It's silly to jump in and out and risk missing big rallies. The declines will be overcome. But human nature hasn't changed much since Adam and Eve. Many people now putting their life savings in stocks will instinctively move to protect them if they sense lasting trouble. Rather than lock in lush profits today, they'll lock in dismal gains--if not outright losses--tomorrow.

Daniel Kadlec is TIME's Wall Street columnist. Reach him at kadlec@time.com