Which Way Do You Want It? Make Up Your Mind!
Price swings can indicate indecision. Is that what's going on now? The Fed announces they're not so hot to trot on raising rates, even though they had said they were.
So Wednesday stocks, when the Fed minutes were released, stocks got a lift. After all, stocks like when rates stay low, and don't like when rates go up. That's what we're told.
Then Thursday stocks reversed. Why? Well, it seems that the Fed's comments about rates not being raised contained a subtext: The economy's not so good. That includes not just the U.S., but the rest of the world too. So weak economy means company earnings won't be all that beefy, continuing the weakness we've seen in recent quarters. And if stock prices follow earnings (as we're told), then stock prices go down when it seems earnings are going down, or at least aren't going up.
So which is it Mr. Market? Wednesday you liked what the Fed said; Thursday you didn't. Can't you make up your mind? It seems not.
Then again, if you listen to the "reasons" why stocks went up or down as reported in the financial media, you're likely barking up the wrong tree. These reasons may or may not reflect the thinking of traders on a given day, but do you really care about that? Are you trading day to day? If not, then why pay attention to either what traders today think, or the reason given by the financial media?
Do yourself a favor. Stop paying such close attention to the day-to-day price movements of any market: stocks, bonds, gold, commodities, currencies, etc. Do you really need or want to feel "good" on a day your positions rise, only to feel "bad" on a day they go down. (Question: How do you feel on a mixed day when some of your positions go up, some down? Do you feel "mixed"?) All of this up/down, good/bad only serves to jerk your emotions this way and that. That can't be good for you. It can't be good for your decision-making.
Listen. I'm a professional. And as volatility has increased over the the last couple of years, I found myself checking my screen one time too many, too many times. (Maybe you think professionals should sit glued to their screens all day watching the prices dance up and down. You'd be wrong.) So I worked on tempering my attraction to the screen. (It's easier to do when things are calm, harder when they're not.) And after much effort, it worked - at least to some (I think acceptable) degree. Remaining calm in the face of a storm happens to be one of the things I get paid to do. Stepping away from the daily screen scrutiny helps instill a base of calm that serves you well when the inevitable high winds blow, or even when a big storm hits. But you need to work at this all year round, so you don't get sucked into the vortex of the wind tunnel that times of crisis bring.
With that perspective, we have to say that Mr. Market can just go about his indecisive ways all he wants. We're not going to partner up with him. We won't dance to his tune. We'll just go about our business. Attack those important and urgent matters that any business presents day to day. As for Mr. Market, make up your mind, don't make up your mind. Either way, I won't pay it any mind; it won't make or break my day.
Try it. I think you'll like it.
So Wednesday stocks, when the Fed minutes were released, stocks got a lift. After all, stocks like when rates stay low, and don't like when rates go up. That's what we're told.
Then Thursday stocks reversed. Why? Well, it seems that the Fed's comments about rates not being raised contained a subtext: The economy's not so good. That includes not just the U.S., but the rest of the world too. So weak economy means company earnings won't be all that beefy, continuing the weakness we've seen in recent quarters. And if stock prices follow earnings (as we're told), then stock prices go down when it seems earnings are going down, or at least aren't going up.
So which is it Mr. Market? Wednesday you liked what the Fed said; Thursday you didn't. Can't you make up your mind? It seems not.
Then again, if you listen to the "reasons" why stocks went up or down as reported in the financial media, you're likely barking up the wrong tree. These reasons may or may not reflect the thinking of traders on a given day, but do you really care about that? Are you trading day to day? If not, then why pay attention to either what traders today think, or the reason given by the financial media?
Do yourself a favor. Stop paying such close attention to the day-to-day price movements of any market: stocks, bonds, gold, commodities, currencies, etc. Do you really need or want to feel "good" on a day your positions rise, only to feel "bad" on a day they go down. (Question: How do you feel on a mixed day when some of your positions go up, some down? Do you feel "mixed"?) All of this up/down, good/bad only serves to jerk your emotions this way and that. That can't be good for you. It can't be good for your decision-making.
Listen. I'm a professional. And as volatility has increased over the the last couple of years, I found myself checking my screen one time too many, too many times. (Maybe you think professionals should sit glued to their screens all day watching the prices dance up and down. You'd be wrong.) So I worked on tempering my attraction to the screen. (It's easier to do when things are calm, harder when they're not.) And after much effort, it worked - at least to some (I think acceptable) degree. Remaining calm in the face of a storm happens to be one of the things I get paid to do. Stepping away from the daily screen scrutiny helps instill a base of calm that serves you well when the inevitable high winds blow, or even when a big storm hits. But you need to work at this all year round, so you don't get sucked into the vortex of the wind tunnel that times of crisis bring.
With that perspective, we have to say that Mr. Market can just go about his indecisive ways all he wants. We're not going to partner up with him. We won't dance to his tune. We'll just go about our business. Attack those important and urgent matters that any business presents day to day. As for Mr. Market, make up your mind, don't make up your mind. Either way, I won't pay it any mind; it won't make or break my day.
Try it. I think you'll like it.
Comments