The market woke up on the right side of the bed today I see. And a good morning to you market as well.
Merkel seems to have won the day in that “that there” German parliament. How surprising is that? Not very, I say. I have said it so much now that even I am hesitant to say it again, but I will – there is no way Germany, or anyone else of consequence, will let the Eurozone or the euro fall apart. It might take some time, but piece by torturous piece a plan will be developed and resolute action will occur. One problem with the market is that it wants what it wants when it wants it. Patience my dear market, patience. These fiscal problems took decades to make. It will take some time to unwind them. Speaking of patience, decades, and time …
Jack Bogle, founder of the Vanguard Group some 35 years ago, is out and about talking it up. He seems to be doing his part to bring back some stability to the market. He seems to be telling anyone who will listen that patience is the key to success in the market. His “old school” thinking about this comes off as a slap against the market players of this decade, but he does make an interesting point about whether this fast and loose style of play has actually made any progress for the market over the last decade …
The problem is that investors want more than 6 or 7 percent gains and they want it fast. Unfortunately, it’s been a wild ride over the past 11 years. We’ve made great highs and painful lows, until finally landing at the same place we started from, a.k.a. “the lost decade.”
This is so true. The market wants what it wants fast. Today it is the European fix in the morning and then something else will come along and the highs of the morning will morph into the lows of the day. The way I see it “investors” have become traders. Investors, rather money managers, can’t seem to ride anything out. I guess I agree with Mr. Bogle on this, but I will take it one step further. Because money managers are under so much pressure to produce a big ROI for their clients, they are no longer proactive, meaning they have become micro oriented. They have become reactive to the day in and day out barrage of words that flow from the cavernous mouth of today’s media. They have become victims of the media.
Looking at the past month or so in the market, it is clear that this is so, and it is clear, to paraphrase a long-gone icon of another era, the medium is the message.
Since August 8th, every rally has been sold, every valley has been bought, and not many expect this to change. It’s enough to drive you mad, and even exit the market, but legendary investor Jack Bogle says turning your back on stocks now would be a mistake.
In this case, the medium is the media and the message is what it is every day – “Believe me when I tell you this news today is the truth.” Well, the coin will flip and the message will remain the same, only on the other side of the coin. Bogle is correct here as well. Don’t give up just yet.
Trade in the day – Invest in your life …
