‘Frontline’ Confronts the Bull Market

If you’re already fearful about your financial future, PBS’ “Frontline” presentation tonight, “Betting on the Market,” is like a big dose of anti-Prozac: You’re bound to feel much worse after these 60 minutes are up.

Based partly on Joe Nocera’s highly readable 1994 book “A Piece of the Action: How the Middle Class Joined the Money Class,” the show is preoccupied with two ideas. First, that Americans are invested in the stock market like never before, mainly through mutual funds; and second, that this unprecedented investment may be a huge societal mistake.

With the help of “average” investors and some of Wall Street’s most quotable denizens--including Fidelity mutual funds’ Peter Lynch, Money magazine’s Jordan Goodman and author Peter Bernstein--the program paints the public’s love affair with stocks as a hopelessly dysfunctional one.

People invest, we’re told, only because they have no choice, because in a world where job security is a memory and Social Security is probably a myth for many, Americans’ only chance of living well is to build up a large nest egg.

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And because stocks have been by far the best investment over the long term, we are “afraid not to be in” the market, the show explains--even though, by many classic yardsticks, the 1990s bull market is overheated and overdue for a major decline that could wipe out much of our collective nest egg, at least temporarily.

Damned if we do and damned if we don’t is the message here, and no solution is proposed.

As a chronicle of what brought the public into the market in such large numbers, there is plenty to appreciate in this program. Its weakness is that it is heavily tilted toward the bears’ side, which is that the public and the mutual fund industry are fueling a gigantic market bubble that will, sooner rather than later, burst and maim most investors.

Unfortunately, the important fundamental reasons why the stock market has gone up so much--spectacular corporate earnings growth and continued low inflation and interest rates--are given short shrift.

So too is the idea that, however long in the tooth this bull market may be, there is no law that dictates it must end soon. The perversely beautiful thing about the stock market is that it is always full of surprises, and it is less likely to satisfy history than to rewrite it.

* “Betting on the Market” airs on “Frontline” at 9 tonight on KCET-TV Channel 28.