Phrases to ignore right now
Wall Street's "Bull" is true to form as market declines
I’ve written two books. The first one was way back in 2006, and I titled it “Wall Street’s Bull and How to Bear It.” No one bought it, because that’s what happens to 99% of published authors, especially if they don’t have a big marketing push behind them.
But many of the investment rules, tendencies and tenets I wrote about 17 years ago are still very much in place today. And as we continue to build out the content on ETFYourself.com, especially in the Learning Center tab, we’ll include some of the better “info nuggets” from that book, as well as the book I wrote in 2010, and hundreds of published articles from a range of media outlets.
For the moment, it is a good idea not to get caught up in the moment. The markets are, as James Bond famously said, “shaken, not stirred.” They are dipping at a very casual but consistent pace. This is how brief pullbacks go, but it is also how major market declines begin. As always, we’ll let the market tell its story, and try to be good listeners.
And that’s why at times like these, the best course of action is twofold:
Seek out and absorb as much information and opinion as you can
Look at most or all of it with a high degree of suspicion
Remember that Wall Street pundits are paid to “talk their book.” And with so many parading through TV and other media every day, the first question you have to ask yourself any time you hear an opinion is this: what’s in it for them?
So, here are a few quick phrases commonly uttered by market perma-bulls, who likely represent firms that manage money the way most do: fully invested, primarily in stocks, and their compensation is entirely based on the percentage fee they charge multiplied by the assets they manage. That means they wave the flag for 3 things: higher stock prices, gaining clients, and not losing clients. So, here are the types of things you will hear that when you hear them, think to yourself, “they may be speaking based on their analysis…or they might just be talking their book.”
“This is a healthy pullback, and now we can buy stocks at better prices”
“The economy is in great shape, and it is handling all those Fed rate hikes”
“The consumer is strong, and keeps spending” (yeah, until bankrupcy occurs)
“Time in the market beats timing the market” (tell that to the folks that experienced more than a decade of zero S&P 500 returns at least twice during their lives, so far).
I have so many more of these, but the “greatest hits” of talking one’s book starts with the four examples above. Hopefully, this helps keep you alert in an era where I expect a sharp ramp up in “Wall Street’s Bull.”