Happiness Is…

I found this great quote over at Pragmatic Capitalist:

… “Money managers are unhappy because 70% of them are lagging the S&P 500 and see the end of another quarter approaching. Economists are unhappy because they do not know what to believe; this month’s forecast of a strong economy or last month’s forecast of a weak economy. Technicians are unhappy because the market refuses to correct, and gets more and more extended. Foreigners are unhappy because due to their underinvested status in the U.S., they have missed the biggest double play in decades. The public is unhappy because they just plain missed out on the party after being scared into cash after the crash. It almost seems ungrateful for so many to be unhappy about a market that has done so well . . . Unhappy people would prefer the market to correct to allow them to buy and feel happy, which is just the reason for a further rise. Frustrating the majority is the market’s primary goal.”

Robert J. Farrell

The quote, from long-time Merrill Lynch strategist Bob Farrell, was recorded in September 1989 after the market relentlessly marched higher after the crash of 1987 without any meaningful pullback.

Bull markets are born out of deep unhappiness.  Everyone feels like they are perpetually missing out.  There are fears in the market that are easy to point at and prosthelytize over, but no easy solution is ever at hand.  The market climbs a wall or worry while the world’s academics fight the previous battle.

Everyone is consumed with the monetary end-times, the sovereign credit-pocalypse, the inflationary holocaust, and the deflationary vortex.  As a contrarian, you have to feel that the best days are ahead of us.

When the market is ripping, investors are pining for a pullback.  When the market pulls back, investors are spooked about whatever “news” came out emboldening the sellers.  This cycle will never end.  So even if we don’t end up with happiness in our future, we can always count on choppiness.

Source: Pragmatic Capitalist


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