“We’ve been expecting a sell-off because..” What BUNK!

Bernanke_official_portraitWell I just have to laugh-out-loud.  We know what the market is doing:

NEW YORK (MarketWatch) — U.S. stock futures fell sharply on Thursday, along with Asian and European equities as well as gold prices and bonds after the Federal Reserve signalled its bond buying could be scaled back later this year. Downbeat Chinese manufacturing data added to investor gloom.

And low and behold the talking heads on business television are giving themselves credit again where none is due.  I heard this today:

“We’ve been expecting a selloff because…..”

The because part is bogus, because none of them were expecting any selloff at all, until long after the selling began.

SP June20-13Now that the tone is decidedly bearish, I can finally talk about getting invested again during the summer months.

I ‘anticipated’ (rather than predicted since predicting is a waste of time) the stock market would run up for awhile (and it did) and then correct to the tune of about 6% from its highs due to creeping lower bond returns (yields creeping higher) over the past several months.  Well, we’re almost there.  Since May the S&P500 is down nearly 4%.

Do I really believe it will decline to below the 1600 level (say closer to 1550)?  If it doesn’t by early July, then STEP UP!  If it does, then STEP UP!

(PS:  Just a few hours AFTER I wrote this commentary, the S&P500 fell right through the 1600 level and closed the day at 1588.19)

Even though I expected the inevitability of this short term panic (read older posts), I also have to take Bernanke and his crew at their word.  If they don’t need to tighten up, they won’t; and relaxing (as I’ve said in prior commentaries) monetary stimulus is not the same as tightening by a long shot.

About Mal Spooner

Malvin Spooner is a veteran money manager, former CEO of award-winning investment fund management boutique he founded. He recently authored A Maverick Investor's Guidebook which blends his experience touring across the heartland in the United States with valuable investing tips and stories. He has been quoted and published for many years in business journals, newspapers and has been featured on many television programs over his career. An avid motorcycle enthusiast, and known across Canada as a part-time musician performing rock ‘n’ roll for charity, Mal is known for his candour and non-traditional (‘maverick’) thinking when discussing financial markets. His previous book published by Insomniac Press — Resources Rock: How to Invest in the Next Global Boom in Natural Resources which he authored with Pamela Clark — predicted the resources boom back in early 2004.
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5 Responses to “We’ve been expecting a sell-off because..” What BUNK!

  1. RGM says:

    do you listen to Tom Sosnoff at tasytrade.com?
    lol, you two sound the same and ring the same bell!
    this is great!

    • Mal Spooner says:

      Thankfully I’ve never listened to anyone really. Clouds my judgement. But then it doesn’t make me popular either lol.

      • RGM says:

        lol. that is exactly what he says too!
        he just started this last year or so (after selling off TOS), and it is so great that I have found both of you!!
        It is so refreshing from all the ‘BS’.

        Thank You!

  2. Stephen Bishop says:

    What about the Metals. Gold and Silver. What do you think is going to happen to those between now and December?

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