Tag Archives: Twitter

“Markets Can Remain Irrational Longer Than You Can Remain Solvent”

The Economy: The numbers were again mixed and eclipsed this week by politics. Housing starts and building permits were down. Jobless claims up, Industrial Production down. Fed minutes were, as usual, a sleeper … watching Yellen kick the can down the road is tedious at best. The excitement was reserved for the NOKO Doughboy, who blinked; for the rewriting of U.S. history that occurred in North Carolina and for the continuing Circus on the Potomac. With the exit of Steve Bannon from the White House, Chief of Staff John Kelly appears to have consolidated his control. If true, we may begin to see a unified message from the Trump Administration. Even if that message is via tweet, it may be an improvement over the noise that has become a distraction. With the uncertainty of the past few weeks, stocks have weakened while bonds have been in a holding pattern.

Food for Thought: Stocks are making some investors nervous. After relentlessly moving up this year, markets have stalled. Is it because August is usually a weak month, or is something else at play? U.S. markets have failed to hold their highs and the FANGs are down about 10%. Bulls see Dow 30,000 around the corner. Bears are salivating for a 20% correction. Central Banks continue to pump trillions into the global economy. As long as Fed Policy is “Free Money Forever” there will be an upward bias to stocks. Yet warnings abound. Fiscal policy along with Trump Initiatives are DOA. Political gridlock under Obama was astonishing; under The Donald it is simply unbelievable. Clearly stocks can’t go up forever. This begs the question for investors who are on the sidelines or short, “Do you want to be right or do you want to make money?” Which of course leads to the caveat, “Markets can remain irrational longer than you can remain solvent.”

Music of the Week: Shakira’s “Can’t Remember to Forget You”


Charlatans, Tramps and Thieves

It’s hard to remember when the world of online investment opinions didn’t exist. Nobody knew or cared what the individual was buying or selling. Opinions were reflected in the price of a stock.

But since the late 1990s the internet has fostered an unlimited array of charlatans, cranks, fools and so-called gurus. Today, any idiot can shout his own stupidity. Much of this is nonsense but the noise is deafening to everyone and confusing to many.

There was the need for more information because Wall Street did a miserable job of getting the word out to investors. But, for the most part, the information vacuum that was created has been filled with haters, screamers and shouters. Granted there are some nuggets amidst the garbage, but the effluent predominates.

Blogs, Facebook, LinkedIn, Twitter and the other social media outlets are full of analysis, predictions and cries of pending doom. The vast majority are pointless forecasts. Perma-Bulls and Perma-Bears coexist in the never-ending circus that serious investors avoid. No one remembers their absurd calls. But again, the noise is deafening.

Smart investors know that online opinion is garbage. There’s no accountability, no performance review and no regulation. Caveat Emptor couldn’t be more applicable.