Tuesday, September 30, 2008
Trust is gone.
That's the problem with the stock market. Investors simply don't trust it anymore.
And why should they?
After all, they've been lied to by CEOs who claim business is great one day, then write off billions of dollars in bad debt the next. Management teams crow about how great the quarter is going, then issue earnings announcements below expectations. And accounting firms certify the accuracy of the balance sheet, then the numbers turn out to be fiction.
In other words, we can't trust the fundamentals.
The technical patterns aren't all that reliable either. It doesn't matter how good or bad a chart looks. It can change overnight. Maybe the government will ban short selling on all stocks. Or maybe it'll plunk a few hundred billion dollars into the market to prop it up.
Or... maybe it won't.
The stock market, right now, is a giant guessing game. Neither fundamental nor technical analysis is working. And investors doubt their faith.
It's like finding your spouse in bed with your priest. Two deep-rooted bonds are shattered at once.
So how do we get through this?
I can only offer you this advice (which Keanu Reeves shared in The Replacements, an otherwise forgettable football move)...
"Pain heals. Glory lasts forever. Chicks dig scars."
It's okay if your faith in the market has been shaken. Mine has too.
It's okay to doubt the authenticity of the stock market. Heck, you'd be crazy not to. But smart investors will remember when that authenticity came into question before. And they'll recognize the terrific opportunity.
All I'm saying is you should be getting ready to buy. I'm not buying yet, but I'm almost there.
Way back in February, I told you we entered a bear market. And now I'm telling you we're getting close to the end of it. It'll take a Herculean leap of faith to act when the time comes. But that's the action legends are made of.
Besides, chicks dig scars.
Best regards and good trading,
Gold is one of yesterday's lone winners... the metal pops back over $900.
Wachovia falls over 80% to all-time low... halts trading on news of Citigroup takeover.
Technology bellwethers Apple, Google, Xerox, and Research in Motion at new lows.