RAH RAH RAH! GO WALL STREET!

January 2, 2004

Are the commentators excited or what? The Dow is up a whopping triple digit 262 points and eveyone is smiling. It’s a new year- or is it? Remember the Dow was up the first three days in 2002 and, well, you know. The Dow was also up the first week of 2001, and yes, the same result- dwon for the year. So, before we get too excited maybe we ought to wait at least a week!

Richard Russell asked several questions in his December 31st report and today’s rally reminded me of three of them. Richard asks, “Why do investors continue to listen to Wall Street experts, when they have been wrong year after year and some proven downright honest? Why do people continue to take Alan Greenspan’s forecasts seriously, when his record of predictions has been so abysmal? And, why are people content to buy or hold dividend-less stocks when they are all still declining?”

My answer(s) are that the experts are nothing but salesmen for their repective brokerage houses and bad news is not acceptable. Secondly, there is an ingrained perma-bullishness and the memories of the greed of the 90′s is still fresh though the lessons have been lost. Finally, we just love to have our ears tickled and anyone who promises wealth will be listened to.

Ahh, but it is a new decade and rah, rah, rah is great for college football and maybe even the NFL playoffs, but it won’t make you a dime on Wall Street. In fact, it will lose you a few thousand- or however much you want to gamble.

Written by Ernie · Filed Under Daily Commentary