While scanning the pages of Barrons.com, I spotted an article I thought might be perfect fodder for kortsessions.com. In this case the media portrayal of the market might be too bullish. As it turned out this was to be a wonderful perspective on the current market through another set of eyes. Here is the headline from the March 28, 2013 edition:
“Good Chance S&P Hits 1600”
Veteran strategist Lazlo Birinyi calls this the
“Rodney Dangerfield Rally,” getting no respect.
Why this could be a “25% year.”
Lazlo Birinyi, you may recall from session 8, has been an observer/ strategist on the market for the past four decades. His article on the “Rodney Dangerfield Rally” addresses the continued media negativity toward the 2013 market advance and compares it to 1994; a similar period of skepticism (smack dab in the middle of decade where the S & P 500 compounded at 18%), a period when the Fed began to raise interest rates in response to a stronger economy and fears of inflation.
This was supposed to be a “Fed Bolt From hell” (a la Jim Cramer). What happened? You will have to read the article (Link) to find out. One tease is that in 1994 the rate on the ten-year U.S. treasury rose from 6% to 8%. At the time, according to Birinyi, people were expecting 7%. All during and preceding the run up in rates the media was very negative. Fast forward to 2013 and we are given examples from the Wall Street Journal, CNBC, The Financial Times and The Atlantic that mirror the negativity that abounded nearly two decades ago…negativity that would precede a market that in 1995 had its best year of the previous half century. That was then. Then may be now.
Obviously, past performance is absolutely not a guarantee of future success, but the Barinyi piece really does give a perspective on whether or not we should hang our fortunes on what we read in the paper and see on the tube. This is what kortsessions.com is all about.
Again, this article gives a wonderful perspective. Please read it (Link) and let me know what you think.
The information presented in kortsessions.com represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain securities for illustrative purpose, names where I personally hold positions. These are not meant to be construed as recommendations to BUY or SELL. All investments and strategies should be undertaken only after careful consideration of suitability based on the risks, tolerance for risk and personal financial situation.