My title derives from the top story on CNBC.com this morning (10/27/13), on a piece from the Financial Times’ John Authers. I wish Authers, the FT and CNBC had been advising me and others to get on the train 8 months ago (S&P + 14% ) or after the election last November (+ 31%). Alas, they were Missing In Action.
In the case of CNBC, not only were they MIA, they were counseling caution as exemplified by this excerpt from session 12 (March 12,2013):
The best part of the day was a segment that was announced by a video of a blaring air raid siren and reported by Michelle Caruso-Cabrera entitled; “Threats to The Market Lurking in The Shadows”. Keep that fear and distrust bubbling just under the surface.
Here is what Michelle had to say that we should be concerned about:
- The quality of the economic recovery is questionable. It is all about the Fed. What happens when they take the punch bowl away? (We address this in kortsession 9).
- Geopolitical shocks are lurking….maybe an oil shock brought on by an unexpected consequence of the “Arab Spring” or Iran and the Nukes. There are always going to be unexpected, fearful events. (The markets have weathered all of the scary, surprise events that have happened in my lifetime-since 1946-, including September 11, 2001.)
- Complacency about Europe. Why not be complacent? Every European crisis in the last three years was a buying opportunity. (They muddle through.)
- The change in government in China. (Hmm? We’ve just replaced the old central committee with a new one. It would appear that they will do whatever it takes to maintain growth and stability, and they don’t need a majority of 100 Senators and 535 Congressmen to agree on a program before they implement.)
- Finally economists continue to worry about the impact of the sequester. (Give me a break!)
The Rule and Not the Exception .
The content quoted above has been the rule for most financial and political media outlets for the past five years, chock full of negative pronouncements. Don’t get on the train. We are headed for a major derailment. Only now are we hearing the rumblings, ‘maybe it is safe to ride the rails again.’
“The Rally That Just Won’t Quit”
Kopin Tan, in Barron’s this week gives an account of “The Rally that Just Won”t Quit” (516 trading sessions without a 10% correction). According to Tan ‘many investors don’t think stocks are overstretched.’ He also goes into a discussion, based on historical streaks, that attempts to answer ‘how long this could last and how it might end.’ Interestingly, this may throw a little more gas on the fires of speculation.
It will end!
No Doubt about it, the current string of sessions before the next 10% or 15% correction will end. I still feel this market has many good years ahead of it, including many scary, sinking spells. As I am not a market timer, I will always be in stocks. I will adjust my exposure when I see exuberance coming into the market. The cited articles may be the beginning evidence of this. In the final analysis owning a stock is owning a business. I have yet to meet a sole proprietor who would think of selling a good business because he or she thought a business slowdown was coming. The only reason people do it with stocks is because they can, not because it is the smart thing to do.
Re: The media-These guys are trend followers and usually late to whatever the trend is.
It has taken them 5 years to pick up on this one. How useful is that?
What do you think?
The information presented in kortsessions.com represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain securities for illustrative purpose, names where I personally hold positions. These are not meant to be construed as recommendations to BUY or SELL. All investments and strategies should be undertaken only after careful consideration of suitability based on the risks, tolerance for risk and personal financial situation.