Only Idiots Make Money with Stocks

You’re a moron for profiting from this year’s powerful market rally.

“The vast majority of America’s 95 million investors are trapped in this bubble of denial chasing stocks,” writes MarketWatch columnist Paul B. Farrell. “Tune out your lizard brain, and tune in to your rational mind.”

Sorry, lizard brain. That money you made in stocks this year? It was earmarked for an idiot just like you…

How could you act so stupidly? How could you buy stocks earlier this year, only to watch them pile gains on top of even more gains?

These statements might seem like the ramblings of an insane individual. And I suppose they are, in a way. After all, they’re the smug rationalizations of the folks who were just plain wrong about the market’s trajectory so far this year…

“What’s insane is warning about an impending crash all the way up, and then thinking that you’re correct every time the market takes a pause,” says Jonas Elmerraji (who was kind enough to dig up the “lizard brain” quote for us this morning). “Farrell has been ‘warning’ about downside in stocks since January 1. Counting dividends, the S&P 500 is up 19.7% during that time.

“How do you miss a 20% rally in stocks and then accuse anyone who actually made money in 2013 of being a ‘lizard-brained’ simpleton?” Jonas wonders. “This, my friends, is the difference between being right and making money.”

Sure, stocks could take a break and move lower from here. With investors pouring more money into stocks now since the financial crisis, a shake-out that sends the broad market lower isn’t off the table.

But I don’t believe this equity inflows story is going to go away anytime soon. A lot of analysts were ridiculed back in January when the “great rotation” discussion began regarding investor’s appetite shift from bonds and commodities to stocks. But now it appears the shift is really happening. And, of course, there’s still a lot of money on the sidelines.

I told you last week that equity fund inflows will help propel the market during the second half of 2013. So if you ignore the noise and keep riding stocks like a slack-jawed fool this summer, you’re on pace to have a great year…

Regards,

Greg Guenthner
for The Rude Awakening