That's about it.Read some Justin Mamis or Bill Fleckenstein. Her's a quote from the latter: So, it's now good news when you raise guidance, lower guidance down, your CEO/CFO stays, your CEO/CFO leaves. And, while I comment mostly about tech stocks, the same "all news is good news" mindset works for housing, finance, transportation, retail, autos, etc. Of course, from a macro standpoint, we have also learned that higher oil prices are bullish, as are lower prices. And, just this morning we learned that a weak economy is good, as well -- because stocks were barely dented by the fact that the ISM opinion poll printed at a recessionary-indicating 49.3, far lower than the 51.7 expected. (This is the first time that reading has been under 50 since April 2003.) In the wake of that news, the transportation stocks were actually up over 1%, scratching on the door of a new high, and many other GDP-sensitive stocks were very strong. We are in an environment that is 100% concept-driven, where facts matter very little, though on occasion they might seem to matter for a few moments. As I suggested at the outset, this is the zaniest moment I have ever seen. The 1998-2000 period was silly (new-era thinking), but it was just about massively overpaying for nonstop good news. Today's mentality is: We can do anything we want, because there is no downside. Obviously, this level of lunacy can't continue indefinitely, but while it goes on, it can reach any magnitude. And, there's no determining in advance whether it lasts for five minutes or 90 days. One can only try to tell when it has exhausted itself. And further: In any case, after the early-morning macho-ness I just described, things settled down as we waited for the FOMC nonevent. Once the Fed told everyone precisely what everyone knew the Fed was going to tell them, the S&P blasted higher by approximately 1% in about half an hour's time. Since the Fed's decision was never in doubt, what that post-FOMC jam job illuminates is the fact that these days, the stock market is a speculation machine, not a discounting machine. Indeed, everything was on fire (ex scattered bits of red) -- including retail, housing, big-beta names, and (to some degree) tech. Whether the wild jubilation was due to end-of-month tape-painting or the anticipation of glad tidings from Google, I have no idea.
<< I've read that some feel our stock market has become a promotion machine as opposed to a discounting machine. >>
Hi psycho. That is a very interesting comment. Can you post a link to such discussions? I have the sense there is currently a larger than normal disconnect between the market and reality. It seems to me that the "fast and furious" money - Hedgies, Cramer etc. - are in the driver's seat. Is this what you mean? TIA