There was a time last year and earlier this year when the markets could only go higher. Central banks “had our back”. Economies around the globe were growing. Earnings and housing were fine. And the Syrian situation had de-escalated. The bottom line had been that no matter how high the price already was, a new target could always be justified for something much higher.
One can’t first look for market guidance on when to invest, and then (after losing money through a sell-off) excuse their wrong-headedness as a sudden penchant to be a long-term investor. Long-term it is indeed, from a risk-reward perspective. From late-July to mid-September, we published here a series of thought pieces (here, here, here, here and here) that suggested the global mood among traders and investors would shift like tectonic plates. That long streaks of up-days, up-weeks, and up-months, would soon end. That the final months of the year would prove to be dangerous for market participants. That the financial markets were overstretching.
Are the major stock promoters suddenly acquiescing to fickleness? Have they ever understood the difference between price and value? Regardless, independent analysis is still a worthy pursuit. And it is rooted in our lengthier history. Scholars and philosophers from the medieval ages started to take a “self” approach to understanding our life’s purpose. In the Renaissance period that followed, a 16th century humanist Desiderius Erasmus Roterodamus, rebelliously quilled against the European authorities, “For what is life but a play in which everyone acts a part until the curtain comes down?”
But we still deserve better. Quantitative and analytical tools exist to help better stay ahead of trends. We need not blindly rely solely on when our central authorities direct us that markets present a good value.
One can’t first look for market guidance on when to invest, and then (after losing money through a sell-off) excuse their wrong-headedness as a sudden penchant to be a long-term investor. Long-term it is indeed, from a risk-reward perspective. From late-July to mid-September, we published here a series of thought pieces (here, here, here, here and here) that suggested the global mood among traders and investors would shift like tectonic plates. That long streaks of up-days, up-weeks, and up-months, would soon end. That the final months of the year would prove to be dangerous for market participants. That the financial markets were overstretching.
Are the major stock promoters suddenly acquiescing to fickleness? Have they ever understood the difference between price and value? Regardless, independent analysis is still a worthy pursuit. And it is rooted in our lengthier history. Scholars and philosophers from the medieval ages started to take a “self” approach to understanding our life’s purpose. In the Renaissance period that followed, a 16th century humanist Desiderius Erasmus Roterodamus, rebelliously quilled against the European authorities, “For what is life but a play in which everyone acts a part until the curtain comes down?”
But we still deserve better. Quantitative and analytical tools exist to help better stay ahead of trends. We need not blindly rely solely on when our central authorities direct us that markets present a good value.
"But we still deserve better. Quantitative and analytical tools exist to help better stay ahead of trends. We need not blindly rely solely on when our central authorities direct us that markets present a good value." - This is very well written, Salil! Thank you for the post.
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