We all know
why these experts are predicting a peak. If they get this prediction right at
least once in their lives they will become rich and famous and get to dine with
other rich and famous persons. Unfortunately predicting da market is a lot like
predicting when Nolan will pull down his trousers and pee on an unsuspecting
bush.
This topic
wouldn’t be so much fun if it weren’t for the obvious and erroneous misrepresentations
made by these prognosticators. For example, they point out that when the
S&P hit 2905 on April 19 of this year, that it was nearing a previous high.
Simple, right? Da market was approaching a new high. On Saturday night when you
have that last glass of Pinot and are approaching a new all-time high – it’s important that you order an Uber to take you home. Just as your evening is about to end,
these snake charmers are worrying that the market is about to retire as well. You should sell your stocks so those folks will make a nice commission
on the sale.
While it is
true that the market went up a lot between Christmas Eve 2018 and April 19,
2019 – it is also true that the market barely edged up an inch between October
1, 2018 and April 19, 2019. Actually, it fell a bit during that almost seven month
time period. So was the market high on April 19?
Or compare it to January 26, 2018 and you get a wild and crazy
1.1% increase in that 16 month interval between January 2018 and April 2019. No
cigar for that performance.
Some of you
want to wring my neck because I have not admitted a key point – if you compare
the S&P value today to two years ago and before two years ago – yes the
market has risen. Yes, it has even risen at a pretty good clip. But come on
dudes – has it risen enough to call off the S&P party? Has it risen
enough to cause a major and significant downturn? Has it risen enough for you
to sell all of Grandmas’ stocks?
I doubt it.
Keep in mind what the market does. Unless the world has fallen totally apart –
the S&P goes up. That means the previous peaks are historical points. We go
from one peak to the next peak. Going from one peak to the next is normal!
Like Nolan
and the unfortunate plants he waters, we don’t know when and where the stock
market will take a breather. Of course it will. But let’s face it, companies
are doing pretty well these days. If the S&P value is at least
approximately impacted by the ups and downs of these companies, then it is not
easy to see why we would soon have a sustained stock market collapse. The economy is
growing. Wages and incomes are growing and jobs are being created every month. Everyone
knows a recession is due by looking at the calendar but very few serious people are
predicting when and where it will arrive.
Sell your
stocks or don’t. But surely don’t put much stock into these stock market
forecasts. Okay, sell a few shares and buy some JD. That sounds good to me.
Dear LSD. In Tuna class we learned thermals go up and thermals go down . . that the tide rolls in and the tide rolls out. The only constant being water remains wet and salty. We were taught that bait fish school/pool erratically and without notice of changing locations and that we must be vigilant in our search for them knowing sometimes we will go a little hungry or full-feast belly . . . sort of like investors in search of yield.
ReplyDeleteSometimes the chad are plentiful, sometimes anchovies are, other times ballyhoo and scad. Ya jez gotta go where the yield . . . er, nibbles . . . are good. Sort of like investors chasing equities or bonds. Sometimes the field of yield is low, nowhere to be found . . . other times it’s gang-busters. Fer example early 2018 wuz bad hunting and cauzed me lots-0-hungry pains but the bounty looks good now and gotz me a full-feast belly.
Yeah, those talk’n headz in Tuna class were all over the sea bed with this and that ‘bout wut the bait fish yield would look like but us classy tunas stayed the course and extended ‘appy ‘our, knowing that the tide rolls in and the tide rolls out and that the water will remain wet and salty. Moral of the story . . . don’t chase the bait fish out’a the water ‘n into the live well.
Spoken like a truly classy Tuna.
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