Fear and Greed, Art Funds and Marc Andreesen – The Panic of 2014

The markets are serious, but they are also a game.

On Friday, the CNN ‘Fear and Greed’ Index hit 1 (one).

"@bumblebeecharts: $SPY $IWM $QQQ Greed O Meter hits 1 Extreeeem! fear, http://stks.co/d16ZU" // 0 is next. http://stks.co/a16VE

— Le$ (@lcc007) Oct. 10 at 08:50 PM

In english that means WTF!.. and Mortimer-get me out! To CNN it means it’s a good time to sell a blood pressure banner ad.

Active fund managers have panicked as well:

Active managers have totally panicked. NAAIM lowest equity exposure since May '12. $SPY http://stks.co/h19jt

— Ryan Detrick (@RyanDetrick) Oct. 11 at 07:46 AM

Even Art Funds have taken a dive. Hold on…which asshats are buying Art Funds in the first place.

Fred Wilson had a post up a few weeks back asking ‘When this Bull Market Would End?’. His technology focused readers were very bullish with a majority saying higher over the next 6 months. I chose Nasdaq 4,000 (lower) and in the comments I mentioned that depending on your time frame, the bull market will never end. I tend to be cheeky over there.

The way I read/interpret Fred over the last year has been cautious at best. Fred made up his mind at least a year ago to get more cautious. In my opinion it has been a great call. It’s why I read Fred. His ‘tape’ (his blog) keeps me ahead of the curve, some call it ‘living in the future’.

As for the game of it all… a few weeks ago, Marc Andreesen did a media tour courtesy of his ‘tweetstorm’ that said startups are burning too much cash. Marc was not sharing anything new, but his reach matters. Every financial outlet picked up on it. My limited partners don’t read Fred Wilson’s blog but they were sending me Andreesen quotes from Bloomberg article. Marc just made my job raising capital harder and helps build a moat around his cash rich investments. He knows that. It’s part of the game.

It’s never to late to get cautious, but try not to follow the panic.

This February, when the small caps index broke lower, I started getting more cautious in equities and have blogged as much. Here is one such post on 3d printing, which I had been long in 2013. Selling in February 2014 was not too late. Take a look at this chart I shared in that post:

Here's a weekly chart of $DDD with 3 analyst price targets that were made in 2014: http://stks.co/a0C7s

— StockTwits Data (@StockTwitsData) Feb. 5 at 09:57 AM

The stock of 3D systems is down another 40 percent since we posted this chart and not ONE of these banks has budged from their silly price target. Wonderful people. Caring.

The tools are at your disposal to get in front of the panics, not be rolled over by them.

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