Nice op-ed piece by Silicon Valley guru Andy Kessler in the Wall Street Journal recently:
From early May through last week, the market dropped 1500 points into the pit, on the backs of gushing BP oil, riots in Europe, a 30% drop in pending home sales and the news that maybe your next door neighbor is a Russian spy. But now we’ve seen 680 Dow points added over seven straight up days before a slight decline yesterday. What the heck is going on?
Call it the yo-yo market—from the top of the wall to the bottom of the pit and back—and you better get used to it. It’s hard to tell which market moves are real and based on prospects for better profits, as opposed to moves that are driven by all the extraordinary government measures to prop up the world economy. Until a few things are resolved, you’d better learn the yo-yo sleeper trick—that is, keep spinning at the bottom without going up.
Kessler said he expects a wild, but ultimately rangebound, market for the forseeable future – until we can get all of the pending “bad news over with”:
Until public policy returns to some semblance of stability, or at least more certainty, get used to 1000 point swings. Get used to the fans of gold and canned goods leading us to the pit of doom one week and bullish optimists up the wall of worry the next. For me, I like to get my bad news over with.
I’m waiting for Spain to melt down the World Cup to pay off its debts, or more seriously, real defaults from Spain, Greece and maybe California and New York. Let’s get on with it and put the structural reforms behind us. That would be a true buy signal
You can read the full piece here at WSJ.com.
More Kessler: Great video interview with TechCrunch on the economy, the future of innovation, and where to invest right now.
Recent Comments