The Madness of Crowds

 In The Lonely Bull

Fear travels like wildfire; in fact, today, at the speed of light. 

Stock markets around the world just succumbed to a list of worries centered upon the outlook for growth and our economy.  Was the expansion over?  Was inflation picking up, forcing the Federal Reserve to raise rates to the point the economy rolled over?  Perhaps it was already in a downturn?  All these fears exploded during the quiet period for reporting corporate results.  This is approximately two weeks before a public company reports its latest results.

During the quiet period, public businesses cannot make any comments about their prospects and must suspend any buy-backs of their own stock.  This is the perfect time for rumors or concerns to run wild and that is exactly what has happened.  Now that actual earnings are coming through very well, investors are getting back to analyzing facts, not conjecture.

The facts are that the economy and most public companies are earning record profits and are themselves optimistic for their future prospects. 

It’s been good to stay steady.

The Lonely Bull

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