Posted At : June 11, 2009 9:48 AM
The market continues to be incredibly resilient, even in the face of less than rosy news, much like that toy of our youth, Super Elastic Bubble Plastic. Fun to play with, solid as a rock as the bubble grows and devastating when it pops. For now, we’re in the bubble growth phase. By the way the market is holding up, we clearly have a “buy-the-dips” mentality by those who feel they have missed this rally and feel the need to get in. Can this rally continue? You better believe it….largely because no one does. I turned positive back on March 9th basically because everyone was so incredibly negative, and I expect this rally to fizzle when the majority is positive. That is not today. Everybody wishes they had gotten back in earlier, assuming they were smart enough to get out in the first place. (Hopefully you have been reading my commentaries). What’s worse is that most say they will get back in as soon as it pulls back some. That alone tells you that it just isn’t going to give people the opportunity. With the individual investor still shell-shocked on the sidelines licking their wounds, institutional investors have been buying up this market anticipating a recovery. This is a very common scenario as the institutional investors tend to buy early and sell to the unsuspecting individual investor at the top. Institutional investors are so much more successful because they do not act on emotion. That’s one of the reasons it’s so hard to manage one’s own money, and why it’s so important to work with someone that knows what they are doing.
Regards – Keith Springer