Agree 100%, Charlie.
See: Buy in May and Stay Invested
Now, I am not of that ilk personally. My closely held biases are that a) the market’s cycles can be interpreted and managed (although my bias also has led me astray at times, in my execution) and b) that the economy, and by extension the markets, are not normal; not your grandpa’s economy and markets because they are ginned and steroidally goosed by off-the-charts (i.e. experimental) central bank meddling. That’s my bias in line with my entire history of public writing since 2004.
So I am not a stock market apologist, bull wise guy or ‘buy ‘n hold stocks for the long’ run tout. But I am the guy who is frequently nonplussed about the mainstream media fanning the flames of investor/trader sentiment during inflammatory news cycles. As Charlie says “it is their job to entertain” and “your job to ignore”.
But this applies not only in the major media. It applies to the minor media as well. Led by Zero Hedge, a whole raft of blogs and other entities are going to fan your flames with all sorts of opinionated, agenda driven or just plain biased information. And what Charlie has right is that it is absolutely imperative to tune it the hell out. That is because the bias never changes because it is promoting emotional viewpoints, promoting sides, teams. In the market the only side is the right side, whether your little heart of hearts agrees with it or not.
Continue reading “It is their job to entertain. It is your job to ignore…”
By Callum Thomas
So far, the recovery from the February correction is proving *not* to be a “v-shaped recovery”, and rather seems to be in a process of undertaking a classic “double-dip recovery”. Headline risk has certainly been a driver, and at this point noise, sentiment, and signals are more intertwined than ever. So it’s timely to take a snapshot of where sentiment is sitting across a number of key indicators including the weekly survey on Twitter.
The high level message from the equity and bond outlook and positioning surveys on Twitter is that of a gradual and material shift in sentiment from the extremes around the turn of the year. Sentiment is immensely susceptible to being swayed simply by price, yet it can reflect a change in mood, and the perceptions around fundamentals can yield important insights.
In this respect, at once the charts show both a market that has undertaken a typical reaction to a correction in prices, while also showing scope for a further shakeout in sentiment and positioning. This is set against a backdrop of a steady shift in the perception of fundamentals. So it’s fair to say the risks are *not* one-sided at this point.
The bullet point conclusions and observations on sentiment and positioning are:
Continue reading Sentiment Snapshot: Turning Tides