"In other words, with interest rates at 1 percent, where else are investors going to go but stocks?"
This is the ENTIRE key to the market's rise the past month. Nothing more. Nothing less. There has not been real fear yet. The sheep are being told all along that the markets CAN'T go down more than 32-34 months in a row. The sheep are being told the markets always come back. The sheep are being told there is no other place to make money. The sheep are NOT being told that keeping one's money is a GAIN compared to losing it. The sheep have totally bought into the belief that a quality fund manager is one who simply LOSES LESS than the averages. This is sheep manipulation and pure poppycock! Joe Shmoe should feel good losing 10% of his money each year as long as Georgie Porgie is losing 20%? I've been approached by several fund managers, and they actually tell stories about how "successful" they have been because they have only LOST a certain percentage the past 2-3 years!
No fear of losing more in the markets, combined with media-induced fear of not gaining anywhere else has resulted in the past month. This, of course, has been upheld with overly-optimistic predictions by insiders and scam artists. Little by little (ala Wal-Mart today), this "optimism" will erode. Then, IMO, some "event" will strike quick and real fear of loss. Look at how the markets have been acting and reacting the past month. Fear in this environment will result in panic. Unfortunately, those whose retirements depend on 10% annual average gains for the next 5-10 years will be sunk. Dreams and hopes will quickly turn into nightmares. I warn all I can, but most have a deaf ear. Most are financially swayed by the Kudlows and Cramers of the media just as easily as they are generally swayed in their thinking by the rest of a minor, unrealistic, and very weird hollywood populace. It is too hard to do one's own thinking in today's world. Let the "experts" do it for them. Let the "shepherd" take care of his flock.
I remain,
SOROS |
