A few peculiarities I've noticed about mainstream financial media:
- Seemingly everyone is a contrarian. It doesn't matter which argument, bull or bear, is being made, it is usually prefaced by "I'm a contrarian by nature" or some variation thereof. Obviously people don't really know what that word means.
- No one is ever called on their record. Let me clarify. The perma-bulls who are wrong on a majority basis (more than 50%) are never called to account. Folks who keep calling bottoms in financials & housing come to mind.
Among one of the many recycled cliches on Wall Street is this concept that stocks climb a wall of worry to go higher, that prices usually go up while investors worry about myriad dangers to equities. And now, I'm starting to hear similar reasoning for the current market. The market is so "gloomy" and "despondent" and equities have already priced in "recession and worse" that they're a good buy right now. Sound familiar?
Meanwhile, while the major business channels are pushing that line of thinking regarding equities, it's not unusual to hear a story about record-high commodity prices accompanied by the word "bubble." Here's a few examples:
- Investors Seek Haven in Commodities (sub. req.)
- Gold Rush Is Overdue for Pullback (sub. req.)
- Stagflation fears as commodities post strongest gains since 1970s [FT]
And of course, who can forget Goldman Sachs' infamous call -- that the best play in 2008 is shorting gold.
I bring up all of this to say that the true wall of worry is in the commodities market. Every day, another pundit goes on TV and says he or she expects the price of oil/gold/wheat/corn/soybeans/whatever to come down as these levels are not supported by the fundamentals. As I mentioned in yesterday's post, even people I respect like Frank Barbera are calling gold "overbought." I love listening to Barbera on Jim Puplava's webcast but if I had listened to his sell gold calls this year and last, I would have left a ton of money on the table.
Back in November, I posted my thoughts on the primary themes facing the market ahead, almost all of which are playing out now and which were, ahem....contrarian to the prevailing professional sentiment at the time (which was tech and large-cap growth were the places to be).
They say the market is a discounting mechanism. I've yet to see that truly be the case.