Monday 4/21/2025
Stocks fall seven times as fast as they rise. This is how so much capital has evaporated in such a short period of time.
I mentioned recently that to the cycle of hope, fear, and greed which is said to drive stock markets, let's add complacency.
the investing columns in the WSJ have been full of it.
Remember why you bought it
Be a long term investor
Don't look at your quotes every day.
You can't make money jumping in and out of the market. (But you can save what you have made!)
The cable business channels are supported by mutual funds, advisory services, big banks, etc. They will never tell you to take your profits and retreat to safety. How wold they explain that to their underwriting clients?
I wonder when complacency turns to hope and then fear. Well it has happened to some investors or we would not be down 1,000 points in three hours today.
SPX looks the same
NDX looks the same as well, though it is falling faster, down 2.98% today.
All of this lines up with 1973-74. The market topped that January and then began a decline. The President had handily won the election but the press hated Nixon as they do Trump. Inflation was alive and well, here we will have inflation due to tariffs, just now a warning about pests in CA avocadoes from Mexico.
Be sure to read my 4/16/25 short courses in currencies post on this blog. There was another article in the WSJ tday along with the market watch article I posted 4/16. Usually in a market sell off, bonds and the dollar rally. That is not the case here.
The 30 year T Bond is down a full point again today.
And the dollar index is down a full point.
June gold however is up $100 just today.
All of this has the makings of a great financial movie plot
the movie Rollover in 1981 at the height of the oil crisis, inflation crisis, was along these lines. The title came from whether the Arabs would rollover or renew
their investment in US T bonds, CDs or whatever, if they didn't how would we finance our government?
At any rate I was showing my class the history of modern currencies since the Bretton Woods agreement of 1944, see 4/16 post. And then read the Nixon shock, no more gold convertibility, and now a new game in town the Asia Infrastructure Investment Bank.
All of this has the making of trouble ahead. At what point do investors lose complacency and really start selling? If you have followed our advice you are out of stocks and in the safety of T bills which should begin a rising yield as well.
More later today.
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