Harvard Business School:
"We are introducing a new course to be taught by one of our most accomplished alumni, Benny Bernankenstein"
Recall, the informed approach to Disney Markets:
"There are times when an investor has no choice but to behave as though he believes in things that don't necessarily exist. For us, that means being willing to be long risk assets in the full knowledge of two things: that those assets may have no qualitative support; and second, that this is all going to end painfully. The good news is that mankind clearly has the ability to suspend rational judgment long and often."
"Today there is no stimulus program that our Disney markets will not consider to be successful"
Good news all around for the financial services crime syndicate.
It's abundantly clear that the vast majority of the suspended judgment class don't understand the stock market. Worse yet, neither do most of today's pundits. Sure, they understand the need to enjoin money printed asset bubbles, however, that is not the traditional definition of financial "expert". Sadly, when this society took the short bus to "Disney markets", today's so-called experts wholesale abandoned all modicum of financial principles, in exchange for imagined realities. Meanwhile, today's ubiquitous "buy and hold" used car salesmen somehow perceived no change whatsoever in the paradigm shift to simulated prosperity amid multi-century low interest rates, merely assuming that stocks will continue to be a good bet in the long run, as they always have in the past. Which is the greatest imagined reality of all and hence the most prevalent.
There is now NEGATIVE correlation between the economy and stocks.
As we see, stocks generally track economic reflation, as one would expect. However, in 2019, stocks have diverged. Gamblers were too busy front-running central banks to notice that the largest monetary expansion in ten years, isn't working:
Here we see that the Fed is basically starting to replicate 2008's monetary bailout.
No surprise, the repo liquidity collapse was just another buying opportunity coming "in the middle" of the longest expansion in U.S. history...
How does this happen?
When corporations strip-mined the middle class down to one last chance for retirement - what we ended up with is a Ponzi stock market inflated via central bank money printing. One last bubble representing all of the combined hopes and aspirations for the "economic" future. But then corporate insiders sold into it with both hands. Because mass delusion was their only chance to get out.
The lesson to be learned, as if simulated prosperity wasn't enough - is that there are two investing strategies that actually do work: One is the value-oriented strategy, meaning buying undervalued stocks and selling them as they reach full value. The Warren Buffett approach. And the other approach is the momentum strategy - waiting until stocks are exploding higher and then jumping on the train. With the plan to jump off ahead of everyone else. Which as one can infer, is not a team sport.
Where almost every investor goes wrong is seeking consensus on markets. In over-valuation, there is no strength in numbers. Which is why today's predominant strategy of buying insanely overvalued stocks and "dollar cost averaging" into more overvalued stocks, doesn't work.
Nevertheless, unrealized gains NEVER FAIL to provide the entirely false sense of prosperity that fools crave.
You have to wonder, how many more times do these people have to learn the exact same lesson?
I'm going with one. Although I said that last time.
