Hot Features
Premium
Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.
Have you ever wondered why there are analysts and economists? The analysts are buried in the down and dirty, devilish details, whilst the economists step back and view things on a much broader scale. The analysts exist to drive investors crazy and the economists exist to help us not get caught up in the anxiety of the moment.
Yesterday, I warned that this could be a turbulent week. We’re only into the second business day and analytical insanity is already driving investors to economist’s couches. Looking at the immediate short term has the potential to drive an otherwise sane investor to contemplate extraordinary measures. For example, I understand that the powers that be have placed fences some 50 yards inland of the cliffs at Dover. Signs on the fences warn, “Short term investors not allowed beyond this point.”
Just take a look at some of the incongruities of that day that are enough to challenge the sanity of day traders and other short-term investors.
- The FTSE 100 is up .50%; the 250 is up 1.23%; the All Share is up .61%; the techMARK is up 1.17%. Huzzahs have been heard from all corners as the market “rebounds.” Rebounds? Really? That’s not a rebound. That’s a dribble.
- How about this headline? “Stocks Rise as Emerging-market Turmoil Eases.” Turmoil? Gentlemen, I suggest that the only turmoil has been caused by insanity of seeing a spate of company reports – almost all of which AGREE that emerging markets are slowing. I humbly submit that this is NOT a crisis, as some analysts would suggest. I do not recall reading a single company report that indicated that an emerging-market slowdown was a major threat. Every one that I recall reported the reality, indicated that the reality would affect their projections, not their on-going business, and that they were well positioned by not being overly dependent on those markets.
- The Royal Bank of Scotland share price (LSE:RBS) gained 3.55% in the wake of yesterday’s announcement of an £8 billion loss on the year, including an additional set-aside of £3 billion to deal with legal fees and reimbursements as a result of its legacy of greed. What an oxymoron! (Okay. I get it. The share price has dropped like a rock over the last fortnight, so it is reasonable to expect a minimal increase at some point as some speculative investors scoop up shares at a bargain price.) My problem is that, when I look at the bank as a company, I don’t have a modicum of confidence in it.
- Speaking of oxies and morons, what is the deal with the drop in the share price of ARM Holdings (LSE:ARM)? This was reportedly a result of a report by International Data Corporation (IDC) that indicated that the 38% growth in the sale of smartphones was largely due to the sale of low-end devices. Hello! ARM’s results are what they are, even with the 38% low end weight. I cannot understand how some wacko analysts can convince even knee-jerk investors that a company’s future is in doubt when that company has proven to be almost an unmitigated success despite the volume of low-end mobile devices.
I could go on and on, but I am going to end my rant with a few final words and reach the same unchanged conclusion that I have offered numerous times before in this space. Invest for the long haul. Invest in something you believe in and are willing to stick with through the good times and the bad. Not only do the odds favor long-term investors reaping greater rewards, they offer a far better chance of you retaining your sanity. I don’t know about you, but I would like to enjoy my investments, their earnings, and my sanity without the loss of any one of them.
