MARKET SENTIMENT The front page of Monday’s WSJ was dominated by articles claiming the market is poised for a correction. If anyone thinks journalists can call market tops, I have a bridge for you.
Sir John Templeton is famously quoted for saying ”Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” It feels like this market is somewhere between skepticism and optimism. No one believed the market could rally this year, but that is exactly what it did. There was Obama’s reelection, Default part I, Sequester, Europe/Cyprus, Obamacare, Sell in May, Syria, Taper, Rising Interest Rates, Sept/Oct market crashes, Shutdowns, Default part II, and countless other excuses people used to stay away. This is the rally no one trusts, yet it does nothing but march higher. That sure sounds like skepticism to me.