By Eric Fry
10/20/09 Laguna Beach, California – Stocks prices are very, very high… Our contrarian colleagues over at The 5-Minute Forecast continuously lament…which means that the collective anxiety of investors is very, very low. Our colleagues don’t mind that a rising stock market is adding trillions of dollars to the asset side of household balance sheets. That’s good news. But the worrisome part is that a falling stock market could erase those trillions from the ledger just as quickly as they first appeared. And as our colleagues correctly point out, rising share prices, coincident with falling investor anxiety, usually adds up to a big, fat stock market selloff…
“In fact,” The 5-Minute Forecast reports, “market volatility is at a 13-month low. The VIX – a gauge of trader uncertainty – is down to 21, the lowest level since pre-Lehman crisis. It’s actually fallen 11 days in a row, the longest losing streak since 2005. (Contrarian alert!)”
Eric J. Fry, Agora Financial’s Editorial Director, has been a specialist in international equities for nearly two decades. He was a professional portfolio manager for more than 10 years, specializing in international investment strategies and short-selling. Following his successes in professional money management, Mr. Fry joined the Wall Street-based publishing operations of James Grant, editor of the prestigious Grant’s Interest Rate Observer. Working alongside Grant, Mr. Fry produced Grant’s International and Apogee Research — institutional research products dedicated to international investment opportunities and short selling. Mr. Fry subsequently joined Agora Inc., as Editorial Director. In this role, Mr. Fry directs and supervises the editorial and research processes of numerous investment letters and services. Mr. Fry also publishes investment insights and commentary under his own byline as Editor of The Daily Reckoning. Mr. Fry authored the first comprehensive guide to investing internationally with American Depository Receipts. His views and investment insights have appeared in numerous publications including Time, Barron’s, Wall Street Journal, International Herald Tribune, Business Week, USA Today, Los Angeles Times and Money.
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Its overdue for a correction.. No v shaped recovery holds if history is any indication.
And as our colleagues correctly point out, rising share prices, coincident with falling investor anxiety, usually adds up to a big, fat stock market selloff…
Usually is the operative word here–we are in uncharted territory. The equities markets wouldn’t be as high as they are without gov’t intervention/manipulation. Why would they stop now?
Yes we are over due for a sell-off.
You are however not considering the effect of inflation on the stock market.
Zimbabwe had one of the best performing stock markets.
It is all lies and we are doomed any way.
I had no Idea the stock market was so involved and complicated. I want to do this right, so even though I just want to jump in feet first, I am going to take my time, study, read and soak up any information I can.