(For those who say I just don’t get it…get this!)
On January 7th I wrote a brief summation on the markets as to the where, when, and path they may take. At this time (and all one needs to prove my assertion is to have been viewing or revisit any financial media outlet archives during that week) everyone was calling for not only a “low” in the markets, but also – for a bounce. And not just a “bounce” but rather, a considerable one as been witnessed so many times previous. i.e., another BTFD (buy the dip) moment.
As usual, it seemed I was on the other side of that argument. Not because I see myself or, want to emulate some contrarian viewed, tunnel visioned martyr. Far from it. What I’ve been arguing, as well as, trying to make the case for is to help entrepreneurs, business executives, managers, CEOs, solo practitioners, and more to realize what the true undercurrents to the economy truly were, and how to position themselves to either take advantage of possible upcoming instability or, to sit back and understand that maybe at this juncture; standing pat, reducing, or fortifying one’s business might be the most prudent thing.
Whether you’re a CEO of a multi-national conglomerate, the owner of a one person tattoo parlor, or just someone trying to navigate the business world; one thing I have found is not an option: You must understand both the broad view as well as the intricacies of how the capital markets are intertwined and both support, as well as overhang many of the daily interactions you or, your company has day-to-day. In today’s interconnect world: Not knowing or understanding – is not an option. Period.
This doesn’t mean you must have the equivalent of some Ph.D. in capital market dynamics. (actually that might be the worst but I digress) However, what you do have to have as well as hone ad infinitum is a Bulls**t meter that is second to none. In other words, when you’re watching, listening, or reading from some so-called “expert” or “smart crowd” representative. If your “spider-senses” start signalling what you’re being told doesn’t quite make sense – you need to heed those inclinations.
Remember: you’re having those inclinations for a reason. Don’t ignore them till you can ease them yourself via your own research and conclusions. You’ll be surprised just how correct you might be as opposed to the so-called “experts.” Search out other media outlets (Zero Hedge™ being a must in my opinion) and reasoning’s from a variety of sources across the spectrum of media and/or blogs. It sounds so “but of course!” Yet, you would be surprised just how few (especially those who say they are!) actually are.
I started these F.T.W.S.I.J.D.G.I.G.T. articles a few years back (and there’s been quite a few) as a jocular version of “I told you so” yet, meaningful in a way as to answer many a critic I would have denouncing my original assessments, whether they were in the media themselves or, at some event or another. I’ve far from been correct on all occasions, but on the big as well as important ones? I’ll bare my track record against anyone in the so-called “smart crowd.”
Over the last week I heard a line stated by one of the financial media’s go-too representatives when the markets seem to be going haywire. The statement absolutely infuriated me as to the cavalier way it was both made, as well as its implications. That statement? (I’m paraphrasing but not by much)
“Well, it appears the recent sell off has allowed the Chicken Little’s to have their day in the sun. I guess they have to be right once in a while, after all so too is a broken clock.”
This was when the S&P was still sporting values that began with 20’s. Since then (only a week) they now begin with 18. And this may not be end of this current rout. However, whether or not the markets do in fact bounce from these levels one needs to keep in mind we were told things like this – were well in the past. Suddenly it seems there’s a realization to the effect – they are just beginning.
The true reason why the above statement riled me was in the condescending way it was delivered. In other words, this is what “typically happens within a bull market” and the implication of “this too shall pass” was heavily laden within the argument. In other words, one would be prudent to be at the ready and “buy great stocks at ever better prices.” Well, that tone surely seemed to fit as I said – when the market still sported a figure in the 2000’s. However, to only days later lose another 200+ points (thousands if you want to use the Dow Jones Industrial averages) and close the preceding weeks with headlines touting “Worst Ever _____________(fill in the blank)? A JBTFD (just buy the f’n dip) moniker of investment savvy has just turned into: “Who wants to be the first to buy a falling knife?” status.
Below is where the market stood on Friday. For those who like to say I just don’t get it…draw your own conclusions. To wit:
Just to reiterate. The above chart represents where we are today however, the ovals and calls were placed and posited when the people regurgitating the above quote were arguing against it. And here we are. As I have stated, you can look back in their archives for yourself. Mine are right here – warts and all.
What I would like to express or, the point I would like to make in all this is in direct confrontation with the idea as well as argument of the “broken clock” or “Chicken Little” thesis many of the “smart crowd” have spouted as of late. Here’s the real issue of the current market status and its implication to the broader economy as a whole…
No, it’s not that the contrarians, or others that have been warning about such things are “finally having their day in the sun.” Again: No.
What’s currently taking place is the true fundamental carnage and rot that has taken place within the capital markets is finally coming to light. And without the rose-colored glass effects or, enabled blinders put forth via the Fed’s intervention, pasted over with faulty reasoning and manipulated data extrapolations is becoming so blindingly obvious – it can no longer hide.
This is what is taking place today in my opinion. Not anything resembling what the “smart crowd” wants to offer up differently. Period.
© 2016 Mark St.Cyr