mrbama9

Why Yesterday's Optimism Wasn't Warranted

The main problem is the market (fueled by the bubbleheads at CNBC, and permabulls like Cramer) being driven by only one piece of news at a time. They can manipulate it to make it sound great, when viewed one piece at a time. But they are ignoring the forest fire to admire a single piece of grass growing. When taken together, there is no justifiable reason for the market to keep moving up. NONE.

As far as the market being a forward-looking discount mechanism, that is true, but the timing for us to be forward looking is not yet here. That should begin once things have settled and growth has flattened out...not when it is plummeting. There is still to much nebulous action ahead. Going ahead and calling bottom when you are still falling and reaching up instead of bracing for impact is called speculation.

The problem there is, and the root problem of all of these messes is pure, unadulterated greed. No one can fathom losing any money so they keep buying to fulfill their own feelings of supremacy. They won't allow the market to fall because they have been fed/told all their life that they are perfect and wonderful and they can do no wrong, and they actually believe it. This type of person will grasp at any shred of silver lining just to keep their fragile sense of self alive. Many of these people are analysts, who feed us their bs lines such as how Lehman severely diluting their EPS is a "good thing". Or how a manufacturing number that is horrible is actually "good" because it is better than their intentionally grossly lowballed estimate. tHey want to be the one to say in 5 years, "See how great I am? I called the bottom!" So they keep making predictions, because 99% of the population will only remember the one that finally came true.

I know this all sounds crazy, but investor psychology drives the market much more than fundamentals these days. This is what fuels excessive exuberance.