A look into the future is right under our noses.
Why are the markets not reflecting the grim economic realities with which we’re faced?
The fix is in remembering that the market doesn’t look at today. It looks at tomorrow. We’re looking at the news from Wall Street, when perhaps we should be listening to Broadway. Remember the song from ‘Annie’?
The sun’ll come out tomorrow. Bet your bottom dollar that tomorrow there’ll be sun.
Just thinkin’ about tomorrow clears away the cobwebs, and the sorrow ’til there’s non.
The sun’ll come out tomorrow, so ya gotta hang on ’til tomorrow, come what may.
“Bet your bottom dollar” might be a little on the aggresssive side, but the ‘Tomorrow’ reminder suggests an aha moment for recent upturns in the markets. The short term trend might not be predictable, but a good predictor, a good periscope.
In January 2008, with the financial stage beyond rosy, the stock market began plummeting in a free fall that lasted until March of the following year. Now we know things weren’t so rosy. A recession had officially begun the previous month, that would cut deep and last until officially June, 2009 or 18 months later.
In March of 2009, amidst enormous worldwide doom and gloom, the market bottomed and began a bull move that, to date, has lasted 18 months. Now, even the most devout pessimist would have to admit there are inklings of improving economics.
What’s wrong with the market? While we are wringing our hands about today, maybe the market is like your own private forward reconnaissance team, looking over the horizon. Maybe it’s singing “the sun’ll come out tomorrow”.