Fear and Greed…Fear and Greed…
The drone of spectacular headlines continue unabated in good and bad markets.
Yesterday, CNN was out saying that Americans do not trust the Stock Market. I read it and I don’t really know what it means for the market and I for sure do not trust the data.
David Einhorn (famed hedge fund manager with fake hair) was also out yesterday saying he shorted a ‘basket of technology bubble stocks‘. Last year David also shorted the ‘overvalued’ Chipotle’s $CMG at $300 (now $520) and in his recent quarterly letter said he covered the loss at $420 and as per the position – quote – ‘It Gave Us Gas!’.
Yesterday, many railroad stocks hit all-time highs. These were the bubble stocks of….wait…1870!
Confused yet? No wonder ’73 percent’ of Americans do not trust the stock market. Even if they trusted it, and they should, they just do not want to take the time to learn the language. That is great news for those that do.
I believe in reading the tape (prices). I believe in following smart people which is still so new a concept for investors/traders in 2014, that it remains an incredible edge. How many great investors are really digging into the new data sets and the ability to connect the dots between public and private markets. How many people really believe that Crypto Currency, The Sharing Economy and Crowdfunded Companies will all be large public market themes in the next three years. Listen to this free podcast that Fred shared (on subject of valuations) and you will learn how price insensitive big institutional money is at the moment. You might not rush to short with Mr. Einhorn.
High Frequency cheaters? Inside information? Problems I can’t solve. They are also problems I decided I could deal with because I believe in the concept of investing in growth.
If you are investing today, you have the tools at your disposal to trounce the averages, not just beat the 73 percent that ignore the markets.