Press and Market Negativity

[Pilot2013]

Anyone else notice all of the market negativity the last couple of weeks? Seems everyone is saying markets are acting counter to norms. One guy (who as I have read is a bond guy and frequently "short" is saying "sell the house, sell the car, sell the children".

How do people that manage $ Billions of funds as a living get by with these kinds of statements? Why do they not get investigated for manipulation of markets for profit?

Anyone making in AA changes?

[fh2000]

The same yahoo.com also publishes this today:

Dow, S&P 500 Are Preparing for More Gains, These Charts Show

https://www.thestreet.com/story/1365...HOO&yptr=yahoo

so, who do you believe?

[DrRoy]

Some people get more attention for touting doom and gloom. More screen time and more quotes.

[audreyh1]

Quote:

Originally Posted by Pilot2013 Anyone else notice all of the market negativity the last couple of weeks? Seems everyone is saying markets are acting counter to norms. One guy (who as I have read is a bond guy and frequently "short" is saying "sell the house, sell the car, sell the children". How do people that manage $ Billions of funds as a living get by with these kinds of statements? Why do they not get investigated for manipulation of markets for profit? Anyone making in AA changes?

Well - unless they are making material disclosures (such as company Y sales are coming in 50% below expectations) that are later shown to be false in a public venue - there isn't anything to investigate. Anyone is allowed to spout off opinions - no crime there.

If they say something like - stock XYZ is going to hell and are found to be short the stock, they might get in trouble. If they say - the stock market is going to hell, sell sell sell, they probably won't be even though they could be short a broad market index.

[audreyh1]

I would recommend that you ignore the financial press. They add no value. In fact, they do the opposite - add poison.

[harley]

Quote:

Originally Posted by Pilot2013 Anyone else notice all of the market negativity the last couple of weeks? Seems everyone is saying markets are acting counter to norms. One guy (who as I have read is a bond guy and frequently "short" is saying "sell the house, sell the car, sell the children".

After a month of helping DD with the brand new baby, I'm taking offers. But I'm keeping the car.

[dallas27]

Not just press, seems like firms are screaming fire as well.

I think the thesis is we are high p/e and this election is going to be crazy, so even if indices are up by january, there will be some major volatility along the way one way or the other.

We'll see, i'm staying on the coaster, 100% stock.


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[dallas27]

...and its august, a rough month anyway.


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[upset264]

Quote:

Originally Posted by Pilot2013 Anyone else notice all of the market negativity the last couple of weeks? Seems everyone is saying markets are acting counter to norms. One guy (who as I have read is a bond guy and frequently "short" is saying "sell the house, sell the car, sell the children". How do people that manage $ Billions of funds as a living get by with these kinds of statements? Why do they not get investigated for manipulation of markets for profit? Anyone making in AA changes?

If someone who is long stocks said to stay 100% invested would you be equally annoyed and call for him to be investigated for "manipulation of the markets for profit". I doubt it.

[Pilot2013]

I think I will just stay with my current, pretty conservative AA until we can see what happens after the elections. I'm pretty much 65/20/15 at the moment, not counting after tax cash holdings/emergency fund.

I really want to figure out something with the emergency fund as it is basically a losing proposition sitting in a Savings account, but no movement until later I guess.

[Pilot2013]

Quote:

Originally Posted by upset264 If someone who is long stocks said to stay 100% invested would you be equally annoyed and call for him to be investigated for "manipulation of the markets for profit". I doubt it.

I guess my point is not just "someone", but someone who has at his disposal enough assets to possibly influence or shift markets. But I see your point.

[audreyh1]

Well, Warren Buffett is usually touting to stay long stocks and don't bother with bonds. But everyone knows what his position is, and he still doesn't have enough to move the entire markets. Maybe a few individual stocks, but not the whole thing.

Now if he told everyone to buy XYZ and sold it shortly thereafter, or was selling while he was telling people to buy - that would warrant investigating.

BTW - only some of those talking heads have a lot invested, and even those who do still aren't big enough to move entire markets. Check out the history of vocal investor Carl Icahn. What he does is not illegal.

[audreyh1]

Quote:

Originally Posted by Pilot2013 Anyone else notice all of the market negativity the last couple of weeks? Seems everyone is saying markets are acting counter to norms. One guy (who as I have read is a bond guy and frequently "short" is saying "sell the house, sell the car, sell the children". How do people that manage $ Billions of funds as a living get by with these kinds of statements? Why do they not get investigated for manipulation of markets for profit? Anyone making in AA changes?

Ah - I see now you are talking about Gundlach's recent interview: 'Sell everything,' DoubleLine's Gundlach says | Reuters

He usually has an interesting perspective and is dramatic in his pronouncements. This one is a departure from more recent ones where he was still bullish on bonds. He's calling a bubble. With stocks having run up to new highs, and bonds also recently at all time highs, it's logical that some folks would be calling a bubble.

I still wouldn't call it manipulative. Of course he's always talking his book - that is understood.

Gundlach is definitely not conventional wisdom - usually a contrarian. I don't know what to say about his current call, but I wouldn't lump it in with generic market negativity of the past couple of weeks. He tends to forge his own path.

Is he right? Generally prescient? Who knows?

[Options]

You are reacting to the worst kind of financial porn. Taking action based on FP is probably the worst thing an investor can do.

I posted not too long ago excellent work from Dirk Cotton (the retirement cafe blog) on the importance of having a well crafted investment policy statement. Thinking these things through in advance allows you to ignore mainstream investment media advertisement vehicles. It's never, ever, ever, ever different this time. Never.

Barry Ritholz sums things up nicely in the following two-part post:

Ritholtz’s Rules of Investing (part I) - The Big Picture

Ritholtz’s rules of investing (part II) - The Big Picture

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Avoid predictions and forecasts: Humans are very bad at guessing what the future will bring. The academic literature overwhelmingly proves this. If you prefer anecdotal evidence, recall how many economists forecast the Great Recession (almost none), the initial reviews of the iPad (mostly panned) or even the iPhone (meh!). For your own investing, you should ignore other people’s forecasts. And you should avoid making any yourself. Why? Because when investors make forecasts they focus more on being right than making money. They unconsciously shift their portfolio toward their predictions rather than what is occurring in the markets. This is a recipe for disaster.

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Investing isn’t necessarily a process of picking the “best” asset class, sector or stock, but rather, selecting what the crowd is buying. Investors sometimes forget that, most of the time, the crowd is the market. (You can take advantage of this by, as Rule 6 suggests, becoming a index investor).

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Asset allocation is crucial: What is your relative weighting of stocks, bonds, real estate and commodities? In the popular finance media, this gets little attention. Yet all of the academic studies show that it’s the most important decision an investor makes. It’s far more important than stock selection, yet that’s all anyone seems to want to talk about. As we noted last summer, “Stock picking is for fun. Asset allocation is for making money over the long haul.” The world’s greatest stock picker would have gotten shellacked in 2008; the world’s worst stock picker made a ton of money in 2009.

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Those who try to beat the market have a tough road ahead: Each year, 80 percent of professional managers fail to beat their benchmark. Of the few who do, once you take fees and costs into consideration, less than 2 percent actually hit that bogey. If you want to beat the market, understand the long odds that are working against you. That is why for most investors, indexing is a much better bet.

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Most investors think they are competing against other traders, big institutions, hedge funds etc. In fact, they are their own most dangerous opponent.

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The best investors generate long-term returns by making rational, unemotional decisions. They do their homework, spend time and effort learning the basics. They are unemotional, intelligent and patient. You can be as well.

Emphasis added

[gerntz]

Quote:

Originally Posted by Pilot2013 Anyone else notice all of the market negativity the last couple of weeks? Seems everyone is saying markets are acting counter to norms. One guy (who as I have read is a bond guy and frequently "short" is saying "sell the house, sell the car, sell the children". How do people that manage $ Billions of funds as a living get by with these kinds of statements? Why do they not get investigated for manipulation of markets for profit? Anyone making in AA changes?

Are you talking about markets going negative or about talking heads being negative about the markets?

[Pilot2013]

Talking heads, etc.

[dixonge]

What market negativity? Hmmm, guess I'd have to read financial news to know what people are saying about the markets. Nah, don't care!