The times are out of whack
Dow Theory Letters
February 10, 2005
from the February 9th, 2005 edition of Richard's Remarks
Is intuition and gut feeling
worth anything in this business? Some people claim yes, but I've
always been dubious. As a matter of fact, I suspect that emotions
can be your worst enemy when it comes to investing. I've often
said that 90 percent of all decisions about anything from choosing
a spouse to buying a house to taking a job to picking a hobby
to buying a dog are based on emotions.
So what are emotions and intuitions worth? In life, they can
steer you right. In the market, well, they can steer you very
wrong. In my business, you gotta watch out for those deceptive
Nevertheless, I'm going to unload my emotions (I'd rather call
them intuitions) on you, my beloved subscribers. Here goes --
I have the feeling that "things" just aren't going
right. Too many people are now struggling to make ends meet.
Too many people are having a hard time making a living in jobs
they don't like. Too many people can't find any jobs at all.
Too many people are finding that they can't afford to retire.
As a result, many people in their 50s and 60s are taking jobs
or at least looking for jobs. Younger people (and I meet a lot
of them) are holding two and even three low-paying jobs just
to stay afloat. Too many people are too deep in debt. Too many
people are living in homes they can't afford. There's too big
a division between the American rich and the American middle
and lower-middle class. There's too much spread in salaries between
workers and CEOs. To put it succinctly, I get the feeling that
"the times are out of whack."
Meanwhile, the war in Iraq drags on. The US deficits and debts
continue. The President's "approval ratings" drops
below 50 percent. Housing turnover is beginning to slow. Nobody
can agree on Social Security. The Democratic party deteriorates
and the Dems fail to even come up with a presentable leader.
"What's it all about, Alfie?" And the answer is, "Who
knows, maybe Russell just got up today on the wrong side of bed."
But you know something -- I don't think so.
Hey, the market advisors are still cheery. The latest count from
Investor's Intelligence shows bulls at 54.4% and bears at
25.3%. Those are hardly gloomy statistics (the problem, of course,
is that we read these statistics on a contrary opinion basis).
Nevertheless, I get this feeling that almost everything is up
and "over the top." The nation's wild optimism is almost
exhausted. Suddenly, reality is starting to slap America's consumers
in the face. "Hey, wake up Buddy, there's a crack in the
punch bowl and the juice is running out."
Well, enough of the so-called Russell "intuition."
. . .
more follows for subscribers . . .
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