So, last night, I went to the 8th-grade dance as a card dealer, and it was kick. Watching the future revel and let loose was fun, but something else made me smile as well. The band consisted of 8th grade kids, and they were good. Interestingly, though, they mixed in music from the 60’s and 70s with their own. As well, the dance floor had a distinct disco feel, colored strobe lights and a revolving ball high above the floor throwing out pin light everywhere. Always, the young seem to grab at the future without totally letting go of the past.
Watching the kids, it struck me that one problem adults have is a few tend to hold on strongly to the past without grabbing the future. This is a social problem, for sure, but it can be a problem in the market as well. For example, if you had your money invested with a company whose CEO did not even own a cell phone, would you feel comfortable?
- Bill Gross, who has used his investment letters as a platform for his views on life, said on Thursday that our modern age is becoming more virtual than physical, “which I find increasingly depressing if only because I’ve failed to keep pace. I don’t even own a cellphone.”
Keeping pace is what the market is all about. Understanding the now is first, but having an eye in the future is just one step behind in importance. The 14-25 year old folks of today are the innovators, businesses, educators, and investors of tomorrow and “tomorrow” is the next five to ten years. Given that Mr. Gross has loudly predicted the stock market out seven years, you would think he would think understanding technology and how the young kids use it would be helpful to understanding the market now and into the future.
- The most unfortunate aspect of this new virtual reality stored deep within “inner space” is that more and more people, especially young people, are evolving to believe that these experiences are “natural.”
And there it is – Mr. Gross is out of touch. Of course these experiences for the young kids are natural. It is what they know and their reality is as natural and pure as any in the past. Depressing? Hardly.
In fact, it is invigorating as an investor and trader to know that the kids of today not only embrace technology, they create a world around it, and in that is a market future filled with opportunity, opportunity my parents did not have, nor did theirs, or theirs before them.
Watching the kids of today tells me in the next seven years, the market will not produce less-than adequate returns, as Mr. Gross said in the same letter to his clients in which he derided the youth of today as believing their technological “now” is not natural.
No, the next seven years promise a market building upon the technological advances that are transforming all of our realities now, a market trending up because the kids of today will then be building businesses and making money in a natural world filled with virtual experience.
- Investors in U.S.-based funds committed a net $3.7 billion to stock funds in the week ended June 4 after adding $2 billion to the funds the prior week.
I said it yesterday, and it seems it is true, the money flow is to equities, if for no other reason than folks see a train leaving the station and they want to get on board. Those who missed out on the money because they were afraid of collapse are now afraid they will miss out on the money.
- A lot of folks are kicking themselves for missing the bulk of the rally, and they’re waiting to get in so they don’t miss any more of it.
As of the last two weeks, investors are getting on board the train. Yesterday and today clearly point to this reality and unless something untoward happens in the world, geopolitical or natural disaster wise, I see nothing that will derail the train. The only thing that will happen is the train will slow down here and there as it drops off passengers and gather speed again after it picks up new ones.
- The market is overbought in the very short-term and will likely see a modest pushback tomorrow and/or early next week.
Yes, it is likely the train will pull into a station soon enough, but the market action this morning suggests it won’t be today. If this reality should change, though, I will get notified on my cell phone where I can then buy or sell, depending on which way it goes.
Yes, I believe this is natural, at least for me, as I have been utilizing this young-persons tool for some time now, so I have adapted. I am on board, rather, I am down with this reality.
Trade in the day; invest in your life …
