I was wondering why I couldn’t find any headlines about the endless euro crisis and so I hit CTRL+F and searched Marketwatch’s homepage for “euro” and sure enough, it was all over the front page after all. I mean, euro-crisis headlines dominate the financial media coverage of the news today like it has for months and even years on end now.
And then I realized, my eyes truly gloss over any euro-crisis headlines now. And as I’m typing this I’m once again having a deja vu of a deja vu of a deja vu — here’s what they’re doing in Europe and in the U.S.: The banks are all insolvent, but no regulator or politician wants to admit that, so they keep shoveling trillions of dollars of direct welfare and wealth redistribution to the banks, they allow the banks to lie about their balance sheets, and they allow the banks to continue paying billions in bonuses for executives and traders as well as millions in lobbying perks and contributions for the politicians from taxpayer money.
Do you think that this game will suddenly fix itself? With enough trillions of dollars to cover the last few years worth of losses, will the banks and sovereign governments in the EU suddenly find themselves cured? Or have we already seen that this is just an extend and pretend game that will continue until the global economy undergoes some huge growth spurt and/or society itself revolts against this endless game of “crisis”?
Better sell GE and Ford right now. Wait, we better buy Citigroup and Goldman. No, sell Caterpillar and Amazon. Wait, now I’m confused.
Seriously, how does one decide to change their stance off random speeches from a famous hedge fund gambler?
Anyway, as I’ve been saying for months and years now, the hardest part of trading and investing in this environment is trying to game when this game does play itself out. Is it a near-term issue? Three months, you say? Where have I heard that before?
That was June 2. Today’s September 4. Did I mention that timing a call like that sure can be tough.
Do you have any idea how many emails I got about Soros’s speech when he gave it three months ago? Hundreds. Who knows how many individual traders and investors actually sold/trimmed/hedged/shorted because they read some articles about some speech that some currency speculator and political manipulator billionaire gave to some other extremely rich folks who avoid paying their fair share of taxes like the plague. The markets are up more than 10% across the board since Soros prophesized pending doom.
Look, I’m not saying that you should put your head in the sand and ignore the global economies and the forces that drive them. But make sure you’re focusing on something that you can actually analyze. The next crisis that actually does hurt the global economies and would actually cause a market crash won’t be the very thing that the entirety of the mainstream media and that every talking head has been warning you about for the last three years. It’ll be a black swan that you weren’t looking for anyway. Your job is to be flexible enough to ignore the steady stream of nonsense but be willing to act when the actual catalyst, whatever it may be, comes down the pike.
From the YouTube description: It’s the tale of Chicken Little, only with Foxy Loxy being a cunning villain who uses a number of psychological tactics to drive a farm full of animals into a cave to be eaten. Slightly disturbing and quite political.
Can I please stop talking about the EU crisis for a while now?
And if you’d like some background on this type of analysis, be sure to check out my new book, “Everything You Need to Know About Investing“ currently the #1 best-selling Investment Education book at Amazon.
Cody Willard writes Revolution Investing for MarketWatch and posts the trades from his personal account at TradingWithCody.com. At time of publication, Cody was net long Amazon. Follow Cody on Twitter at twitter.com/codywillard. Cody’s #1 best-selling Amazon book, “Everything You Need to Know About Investing,”, is available in digital and in paperback.