“Metaboring” – Just the Way the Stock Market Should be
In the era of real-time news, Twitter, high frequency trading and “what have you done for me lately”, I think it’s kind of nice that the stock market has become “metaboring”. At least that’s what Goldman Sachs says of the current market environment:
“Metaboring: it’s getting boring to make the comment that equities are again boring. Or maybe that’s called boring-squared. Here’s to hoping tomorrow is boring-cubed. To reinforce the point that nothing much is moving, our US portfolio strategy team has 20 ‘thematic baskets’ (that I can see on BBG anyways), and not a single one moved more than 1% today. None of the 8 ‘macro baskets’ moved more than 50bps.”
I remember back in 2004-2007 when everything was calm and quiet. There was no persistent crisis, no perpetual fear mongering, no fiscal cliff around the corner, etc. The market just wasn’t very sexy (I guess stability really does create instability, huh?). It was what a stock market should be. A place where investors can buy into the secondary market, own a piece of corporate America and not have to stop their day job to make sure their life’s savings isn’t getting sucked down the tubes by someone at Knight Capital or some politician in Europe. In a perfect world, markets are supremely boring to the point where you don’t even need to worry about them more than a few times a year. But that’s not the world we live in today. We live in a world where you’re convinced that churning your account and minding every market movement is in your best interest. More often than not, it’s in the best interest of Wall Street or the media and no one else. Anyhow, before this turns into a rant…here’s to hoping for more “metaboring”. But don’t bet on it….
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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8 Comments
Not boring – it is exciting that SPX is approaching a 3-year high today. If it is able to exceed the 1419 high and stay above that level for more than 2 days, then we may have a re-confirmation of the bull market. I think we may be in the final stage of this 41-month old cyclical bull market, but sometimes cyclical bulls end with a blow-off top. That could be the case in the next couple of months.
Well said CR
If anyone can think of seeing the analogy I used of the honeybadger/SPX before me than I’ll note it. But the first time I saw it was when I wrote it and is well documented on this site. True story
The honeybadger just got kicked off the team when leadership decided it would no longer sponsor and condone it’s behavior. No one was better than the honeybadger…he didn’t give a shit..but in the end..they had to let him go. He became beyond their control.
What does this mean for the SPX? We should find out in Sept.Is the honeybadger the precursor to the SPX…you know I’ll be all over it if it is. (btw-Fight ON!)
Remember I’m invested- making money- but it’s not from some kind of skill- the market is beyond my understanding. I don’t hate th bears or the bulls- I can see both points of view. I’ll leave it at that.
@VII,
RIP honeybadger – will he return? You were 40% long equities about 5 weeks ago and if you have held or increased that position, you must be making a good return. I congratulate you. I have not done as well, but at least I have held on to my small 20% long equity holdings, which are offsetting my bond losses. Cullen, in this piece you seem to be hinting that this could be the calm before the storm, comparing today to the time from 2004 to 2007. Another one who views this as a potential calm before the storm is here: http://blogs.marketwatch.com/cody/?link=skey
Yes- I’m doing fine. Nothing has really changed for me. The work is telling me to stay long–it’s going up and i want to bail.
We still have some things that I see that scare me simply because in order for them to come true their just really nasty and quick down. But I’m letting the market take me with it.
We should get a sell signal soon…so my brain tells me to just go to cash in advance sometime next week and lock in the gains before the signal.
Boston Larry- I don’t have a clue- Honest answer-
I’m told Central Bankers this and Central Bankers that.
This is the Central Bankers bubble- the worst one of all…Bill Gross’s new normal of 5% equity returns should be pointed out. Everywhere I look stocks are up 5% today. This market is silly.
Again- I have no clue
@VII, thanks for your honest answer. I don’t have a clue either. If I did, I would have been more than 20% long over the past two months. Historically there have been many times that the market has gone far ahead of the economy. This may be another one of those times. I try to place where we are in cycle terms. I think there are very few occasions in which a cyclical bull like this one has continued for much longer than 41 months. We are also 12 years into a 14 to 18 year secular bear market. The odds say that bad things tend to happen during late stages of secular bear markets. And the Europeans are less than half way into the deleveraging they need to do. Odds of major upside from here appear to be low. Good luck!
Cullen, do you think it makes more sense to buy equities on strength because they are rallying to a 3 and a half year high today? Or sell some equities and take profits because SPX 1419 is a level where it topped out last April and may do so again? Has most of the good news been priced in here?
Between you and me (and thousands of blog readers), I think a lot of good news that hasn’t actually yet come to pass has been priced in here.
There’s a *awful* lot that can go wrong in the next 6-12 months, IMHO. It’s hard to imagine *all* the bad scenarios playing out, but it’s also hard to imagine that *none* of them do either.
The answer to your question resides in whether you think there is potential upside to a degree that would make you dearly wish that you were still long should it come to pass. Certainly you don’t think you (or anyone) can call a precise top, right?
Lance, thanks for your reply to my questions. I’ve been investing for many years and I have learned that I can’t call either a top or a bottom. I’ve learned to deal in probabilities, and then allocate assets accordingly. My sense here is we are in the late stages of a cyclical bull market with somewhat limited upside from here, limited both in duration (time) and extent ($ value). The economies of Europe and China are weakening. The US economy is stuck in slow growth. QE3 won’t have much of an impact.