Ahhhh …. Life is normal again, and it feels right. In today’s sense of normalcy, a learned lesson or two in life resides. One of those is familiar to me from repetition in my childhood and the other I am just starting to learn through repetition. Yesterday, I just “relearned” the latter.
My computer is working. Yup, the same one I gave up on yesterday is the same one I fixed yesterday. I know I said I couldn’t do it, but I was wrong. I was wrong for two simple reasons – I underestimated my natural tendency to persevere (not give up, stubbornness, don’t like to fail) and I underestimated what is in the collective storage bin known as my brain.
After many decades on this planet learning different things, doing different things, and paying attention, my storage bin is quite full. The lesson I relearned in this context is that when one has stopped doing a thing day in and day out (specific work for example), and then one needs to do that thing, one needs to be patient and rummage through the storage bin to find the known solution to a problem.
I fixed my computer yesterday because I decided I would give it one more try and when I did, I remembered a command from my days as a network administrator and high-tech guy. When I saw that command on the screen, I knew it would work, and it did. My surprise then was not in that it worked, or even that I fixed it; rather, it was in the fact that I did not go to that command on my first try. Hence the lesson relearned.
The repetitive lesson from my childhood is that my mother always told me and my siblings, “Slow down. Take small bites. Chew your food thoroughly and then swallow.” Okay, so everyone’s mother told them that, but the lesson is still good, and the market could stand to either remember it or relearn it.
- The stock market enjoyed another broad-based advance on Tuesday with the S&P 500 (+2.0%) posting its fourth consecutive gain.
Too much too fast could cause choking. The market needs to slow down, take small bites, and chew its food thoroughly before swallowing. Yes, earnings are good and the economic fundamentals are good, but if the market swallows too many points too fast, we will find ourselves dealing with the same valuation issue – P/E ratio too high.
We will then see the market rummaging through its collective storage bin of knowledge to find a way to “fix” that valuation issue. Unfortunately, the command it will find after many attempts at identifying the problem (“bad” data, geopolitics, the Fed, The US dollar, bubbles, and on ad nauseum) is, “Correct thyself.”
Interestingly, it does not matter if I don’t like the market behaving this way; it is the way of the market, and it feels normal, like that or not. When the market is in panic mode, selling off, and otherwise acting irrationally, I should simply pull from my storage bin what I already know – as long as the economic fundamentals are in place and earnings are growing, the market will find its way to a balanced state.
- U.S. consumer prices rose marginally in September as energy costs fell broadly.
So, I feel good today. All is back to normal. I have my news bookmarks, my email alerts, and my trading platform all working just fine. The only thing missing is my home. No worries, I will be back there tomorrow.
Today, however, it appears the market is remembering the childhood lesson we all learned – Slow down. Take small bites. Chew your food thoroughly and then swallow.
Maybe, the market will stay with the plan and not break itself again, not have to go through that rummaging process to relearn what it already knows – just stick with the economic fundamentals and earnings and you will find your balanced state. Yeh, right!
Trade in the day; invest in your life …
