Meanwhile On The 3Rd Rock From The Sun

There have been thousands of reasons to suggest the world as we know it is sure to end, including the simple reality that we are hurtling around in space on a rock, moving faster than a Tesla, and in close proximity to a great many other rocks of varying size and velocity.

Of course, the same holds true for the financial world. And we are reminded each day by the headline writers about each of the alleged economic asteroids and other seemingly malevolent bodies and barometers hurtling towards faster than an algorithm.

So, do you worry?

Well, if you are then you’ll not be short of company.

But the thing to keep in mind is this: Markets don't work on what's happening now, they work on what's next.

You see, at the very same moment the world is focused on Problem X, there are simultaneously vast numbers of people solving that problem with ideas, actions, tools, creations, new services, technologies and ways around the problem.

You name it, it’s being solved.

In fact, almost everything we know and see is the result of a previous problem being solved.

And that means all the worries and fear about markets and investments - or any daily, weekly, monthly or quarterly trend - is a bit like hanging onto a stop sign in your mind.

It stops you from participating in what's next.

How do we know that?

Well, just two weeks ago AAII Bullish sentiment was at 26%. That means nearly 75% of the crowd did NOT like the market.

Two weeks ago, folks!

I still have people tell me to this day that the only reason stocks have gone up since 2009 is because of quantitative easing (QE).

That's it…the only reason.

And the conversation that endorses that conclusion usually sounds something like this:

Me: Hey the market is staying pretty solid.

Investor: Yeah Mike, just because of that QE nonsense.

Me: You mean the QE that ended over three years ago and was being tapered for 2 years before that…that QE?

Investor: My point exactly dude. Just wait until they unwind that avalanche of debt in the system. You can say good bye to any money in the market at that time my friend.

Me: Uhhh, so the US Fed’s balance sheet was "bloated" with debt because the whole world wants a ton of cash. And no one wanted 3 trillion Chinese yuan in their bank account.

Investor: Yeah Mike but the dollar is going to be worthless anyway when Trump is done pi**ing off the entire planet. America is finished.

Me: So then maybe you would prefer "emerging markets"?

Investor: That's the first smart thing you have said. The other markets are much safer and better value. They have been saying that for the last year or so. Besides, China is going to rule the world anyway - and Trump is doing exactly what they and Russia wanted.

Me: Wow, that's a whole global viewpoint in like 40 words or less. You have watched the emerging markets this year, no? They are down pretty deep into red ink territory - some are even in bear markets.

Investor: Bingo! You hit the nail on the head. It’s a bear market. Ours is coming soon, buddy.

And then they wait for it to happen, sometimes for decades.

And the bull market charges on by.

Mike Williams
Founder and Managing Partner of Genesis Asset Management, New York