The Market And The Damage Done (To Investor Psyches)

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Market On Open, Thursday 9 April

by Alex King, CEO, Cestrian Capital Research, Inc.

Here are just some of the reasons to be concerned about the real world:

• The war in Iran and whether the ceasefire will prevail or not
• The changing world order and how the world will look once the post-WWII institutions finally give up the ghost, as I think they will
• The Russian invasion of Ukraine and the spillover consequences thereof
• The price of gas and, soon, the price of food
• Rich people getting richer whilst poor people get poorer
• Changing weather patterns meaning that even if you own a $50MM home in Florida you still have to jack the thing up on stilts to avoid taking a bath every time a jetski whizzes by
• And a lot of other stuff that I am too busy to think of right now but which are definitely bad

These things are all legitimate concerns. Usually investors focus on the things to worry about, rather than things which can go well. But if we thought about it for a moment we could probably put together a list of things to be happy anout in the world right now. We won’t, though, because even though stocks only go up over the longer term, our brains are conditioned to treat upside movements as a surprise to be faded, whereas when gloom hits markets we say “See? SEE? I just KNEW it was all bad”. And this is how people end up missing out on big bull runs that they don’t believe (even though there is no believe, there is just price, actual price) or, worse, shorting markets at their lows and then wondering why the market keeps making them poorer.

I think this latest wall of worry - WW3 no less - is likely to be overcome by price. I think yesterday’s rally has legs. But I am not wedded to the notion, and I already know what I will do if things turn south. All we can do is follow price and be ready to switch direction if price switches direction.

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Alright. Let’s take a look at markets.