Back in July I was reading an article on the Wall Street Journal’s web site that I must admit I found amusing. It was an analysis of the sudden and dramatic rally the stock market had recently experienced, a period in which the Dow Jones Industrial Average gained 10% in only about a week.

The article was amusing because it contained lots of quotes from “experts” who were confounded by the rally. One trader, for example, remained steadfast in his contention that market sentiment on Wall Street was still negative, but said had no choice but to be buying because of all these pesky buy orders he was being flooded with. This is the kind of myopia that sets in when you work on Wall Street and believe it is the sentiment of a handful of traders, as opposed to the intentions of billions of people all over the world, that determines the direction of the market.

The comments from the experts, however, were nothing compared to the handwringing that was going on in the follow-up comments that readers had posted about the article. One woman was calling for a “supercop” regulator who could prevent these “bubbles” from forming in the stock market again. (Presumably she would like a government entity to approve who gets to buy stocks and who gets to sell them.) Another was haranguing all the “idiots” who were buying into the market when the economy is still in such bad shape. There were pages and pages of these comments, and almost all of them were communicating the same plaintive wail:

“The market isn’t supposed to be doing this! It doesn’t make any sense! All the news is bad – it’s supposed to be going down!”

For the past ten months, it’s been easy money to bet against the stock market. All those folks who did so looked like geniuses, and were quick to guffaw at those who were staying put in a market that was stuck in reverse.

Now they are experiencing the other side of the coin, and they are finding it none too fun. They are railing against a market that has taken off just when things seemed the bleakest, claiming it must be a temporary upswing on the way to fresh lows at some point down the road.

They look at the nearly 50% gain the market has logged in only a few months, which they have completely missed out on, and tell themselves the market is “overbought.” But they are unaware of the dramatic gains that occur on the other side of historic bear markets. Like the 47% gain the S&P 500 posted in only eight months coming out of the 1973-74 bear market. Or the 50% gain the market saw in the months coming out of the 2000-02 bear market.

I don’t pretend to know where the market is heading in the short term. But there are a lot of folks who did pretend to know and made their investment decisions accordingly. And right now they are paying a heavy price for their hubris.