Everyday investors don’t get up in the middle of the night and short S&P futures. The phenomenon of waking up to stock market futures down hundreds of points is a hedge fund/ professional one. They are driven by considerations such as relative currency values that affect carry trades and other esoteric hedges they may have employed. As a reminder, carry trades usually involve borrowing in one currency and then investing in another.

This and other strategies have nothing to do with investing in the real economy or in real companies. These strategies in many ways seek to simply game short-term imbalances.

Unfortunately, short–term strategies are moving many more markets on a day to day basis than they used to. This may be because so much capital is now allocated in this way.

Too many individuals and institutions have lost patience with fundamental investing. This is too bad, because these amount to trading and too often traders die broke. Just look at how many hedge funds closed last year.

The great investing fortunes were made over time the old fashioned way. So investors have to endure these short-term swings, keeping faith with their longer-term strategies. Stay steady, my friends.

the Lonely Bull