Stocks quoted in this article:
Yesterday we learned that we are best advised not to tinker too much with our exchange-traded fund (ETF) positions. Today's "lesson?" Maybe we should ignore news altogether.
Chuck Jaffe on MarketWatch took on an interesting project in July. He took a snapshot of the MarketWatch front page at 5 p.m. each day. And here are some of the headers he found.
- 'This is not an average, typical or normal bull market' [expert] says
- Today's bubbles aren't like the famous bubbles of the past
- If ever the stock market flashed a 'sell' signal, it's now
- 'Rotten rotation' could signal bull market is living on borrowed time
- [Expert]: U.S. stocks will be 'very disappointing' for 10 years
- A stock correction is coming, then more years of gains; [expert]
- [Expert] There's a big hole in the bull case for stocks
- We're in the third biggest stock bubble in U.S. history
- Not much fallout from Gaza, Ukraine? Wait a year, says [expert]
OK, those are some of the bearish ones. What about the flip side? Well…
I would have included something from an expert suggesting a big gain ahead, but there weren't any of those atop the pages I looked at (they could have been there at other times of day).
Well, if everyone's bearish, time to get bullish, right?
If only the markets were that easy.
I think, in reality, it's just the nature of the current media backdrop. The bear case is almost always intellectually more appealing. Saying stocks are going to continue to slowly grind higher sounds about as boring as … well … watching stocks slowly grind higher. Making a case for something different just plays better, and kind of puts a value-add to your opinion. I mean, who's paying to hear someone say "same old, same old?"
And calling a top and a trend change? Yowza -- if you time it right, you'll have instant financial TV and Twittersphere fame.
Speaking of Twitter, for whatever reason, it's a medium that's tended to attract more perma-bear (or, really, perma-skeptic) sorts than anything else. "Zero Hedge" is probably the most "famous," but there are plenty of others. And before Twitter, it was the financial blogs that tended to lean that way.
And don't forget, MarketWatch itself is looking for eyeballs. Bearishness just plays better.
I tend to view all this stuff in a contra lens. So, yes, hearing "everyone" is bearish would make me bullish. I just value indicators more if they are backed by actual numbers. Several of the people quoted above may read bearish, but in reality, they're not necessarily reallocating their money in any way. If they're all buying puts or CBOE Volatility Index (VIX) futures, then yes, I'd view that in a contra lens. Otherwise, I think it's more just the nature of beast.
Disclaimer: Mr. Warner's opinions expressed above do not necessarily represent the views of Schaeffer's Investment Research.