Did you see this front page story in Saturday’s Wall Street Journal (11/23/2013)
? The article posits: “…whether stocks are overvalued or fairly valued isn’t the question investors should be asking. Instead, what you need to answer is this: how much can I stand to lose before I bail out?” This is very cautionary stuff, considering the fact we have just just finished two all-time high days for the S&P 500 and Dow Jones Industrial Average (after breaking out of a thirteen year trading range). This is something that should be creating some excitement, but it is being met with total distrust. It was not just the WSJ. Here is a sampling from several other outlets:
–This Saturday’s (11/23/13) Headline on MarketWatch read: “If Bubbles Are Out There These 10 Sages Will Warn Us.”
(note the above cartoon, dating from 1901, points out the never-ending propensity of bankers to ‘step in it’, create bubbles. This has been the case long before John Pierpont Morgan walked this earth and will be the case for future generations.)
IMPORTANTLY, this was the lead and there was no mention of the breakout to new highs, just more ‘bubble’ talk.
–The “Sunday Business” section of the New York Times contained NO mention of these market milestones.
–Sunday’s Barron’s also contained no headline mentioning the new highs, but we were treated to the following in a prominent position on the front page.–
“A Turning Point for Stocks”—“U.S. stocks are starting to look expensive, especially given Corporate America’s meager profit growth, but investors are still drinking from the punch bowl the Federal Reserve has spiked with easy money.”
–CNBC did mention the New All-Time Highs Saturday in the number eight position on its headline menu. In a more prominent position we found, “Stocks enter the holiday season with a tailwind .” Reading further in the piece, it becomes clear the author may have meant “headwind” as he then reeled off the negatives.
The media continues to do what it does best, spin fear and reinforce the idea that investing at this time is dangerous. They have be doing this since the lows of 2008/2009!
What is really important is none of this remotely resembles “Irrational exuberance.”
Should we correct? Yup.
Can we correct? Sure.
Is a Bear Market right around the corner? At the moment the prevailing caution, the ‘wall of worry’ would not indicate that to be the case.
What is your take?
In Memoriam
Farewell, adios, adieu, auf Wiedersehen Maria Bartiromo. The “Money Honey” as she was known early in her broadcast career is leaving the world of CNBC to join the FOX network. Maria’s misinformed opinions, editorial comments and the asking & answering of her own questions will not be missed. It is my fervent hope that CNBC will not be able to find a replacement and that she will add as much credibility to FOX as she did to her last employer.
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