Tuesday, September 13, 2011

SpongeBob Market

Who lives in a pineapple under the sea?
Sponge Bob Square Pants!
Absorbent and yellow and porous is he.
Sponge Bob Square Pants!
If nautical nonsense be somethin' ya wish.
Sponge Bob Square Pants!
Then drop on the deck and flop like a fish.
Sponge Bob Square Pants!
- SBQP 1999

I hope to have a more thoughtful blog post later today but this morning is does seem that the stock market is flopping around like a fish after it was dropped on the deck of a boat.  In Quick Takes Pro this morning I wrote that it was like a heart in arrhythmia, beating wildly and not getting anything done.

click for a tune


Will said...

The market seems to be swinging in both directions depending on whatever the new Greek bailout/default rumor is.

Something that caught my eye this month, cash at mutual funds fell to new all time lows: 3.3%


Further meaningful declines could put the heat fund managers as they get hit with redemption orders and no cash on hand. In 2008 we saw the same thing.
Forced liquidation cycle ahead...?

-Will L.

Quick Takes Pro said...

Agreed. The mindset out there, even now, is to look for a bottom meaning "stay the course." This is the second most dangerous phrase after "this time its different."

Prince said...

"If I wasn’t reading the Wall Street Journal everyday and listening to CNBC when I’m driving to work in the morning, I would think that we were in the middle of a pretty strong economy," US Airways President Scott Kirby told analysts today.

The battle between the fundamentalists and technicians is looking good. I love the technicians, especially when they have such a good record over the last 2 years predicting the bear.

Game on!

Quick Takes Pro said...


USAirways stock, even after yesterday's huge - and I mean huge - rally, is still down more than 50% from last October. Looks like a bear to me.

But I agree - game on!

Will said...

I don't think CEO of a huge company really going to be in touch with what's happening on main-street America. And he's paid to be positive. I'm sure not much has changed with his lifestyle, or others who are so lucky to be that financially well off. Just maybe the notional value of his stock options. He can probably over lose half his net wealth and still be a multimillionaire.

The difference is even obvious when you look at the performance of the high end retailers.

The stock market has recovered much of it's losses, try telling that to someone who has been looking for work for over a year unsuccessfully.


Amalan said...

That's the problem.. people focus on the jobless and forget that the businesses are making a ton of profit. I was listening to Ron Baron, the billionaire investor, who also reflected the sentiment from businesses after interviewing them - all of them are careful, but they are still doing well so far. They have figured out how to adjust to the new reality and squeeze profits.

Not to be flippant about the jobless, but the fact is the equity markets reflect business profitability in the long run, and sentiment in the short run. As of now, fear is ruling the markets; profits will come into focus in time.

I do feel for the 10-15% who are suffering, but that's a different topic.