37 Summers, Same Ebbs & Flows
The daily message of dark undertones from the media is: "Underneath the impressive rally is a trend that doesn't seem quite right..."
It's almost hilarious.
And I swear I could almost cut and paste my notes from last year into this year…and for the previous year, and so on and so on…
Make no mistake:
- Foggy horizons are the name of the game
- Volume will continue to ebb
- Headlines will jerk your emotions more often (because it is not very busy during summer), and
- Chop will be normal - some up - and plenty of it down.
Embrace these things as normal and not as if something is "wrong" or out of the ordinary.
Watching paint dry may be more productive.
Thirty-seven summers in this business and they pretty much all look the same.
The latest AAII sentiment is out - and even as we sputter a couple percentage points off all-time highs (ATH's), I admit this is the smallest week-to-week change I have ever witnessed.
Permitting yourself to relax about the future tends to let your more productive thoughts (and actions) rise to the surface.
Consider the AAII data above.
There’s just a bit over 70% of the crowd that does not "feel good" about stocks. And that won't change at lower prices.
That means only about 29% of the crowd thinks stocks are ok.
Now, show me a couple weeks of summer swoon red ink running from a media desperate for eyeballs and adverts, I’ll show you a number closing in on 20%, which is within shouting distance of the paltry numbers seen in March of 2009 – when the Dow Jones was at 6,700.
It’s as shocking as it is great news for long-term investors.
The one thing you can be pretty comfortable with is this: Bear markets do come and go, and we will most assuredly have more of them in the future. But the odds of them beginning anywhere close to the fearful sentiment present today are damned near nil.