Headlines That Make You Want to Sell Everything
A historic nine-month advance is raising expectations that coronavirus vaccines and stimulus programs will keep markets surging in 2021--the Wall Street Journal, January 3, 2021
Back in August, 2013 we published a brief bit of market commentary when it looked to the IMF like nothing good was ever going to happen in Spain ever again in our lifetimes: to whit, we wrote that some headlines just make you want to run out and buy as if your life depended on it. You can read the blog here but the previous sentence contained the entire text anyway.
Yesterday the WSJ published a story that has had precisely the opposite effect, quoted above.
Now, we are not attempting to suggest every time a certain type of headline makes it way to the front pages of the newspaper and it triggers some type of primitive response in your editor’s neuron pathways, that such a contrary response is proven correct.
But when the stars line up like they’re lining up—margin debt at all-time peaks; 10 million new investor accounts during the pandemic; Robinhood turning a very serious business into a videogame; interest rates going up on a Federal balance sheet so loaded with debt you’d think some real estate guy had gotten a hold of it, and, if the Senate changes hand tomorrow, tax hikes for corporations and the repeal of industry-friendly regulatory regimes that are certain to hit the “E” in that old-fashioned thing called a “P/E” ration—it’s worth taking a look at what direction those stars are pointing.
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