There is a well-known Wall Street saw that goes something like this:
“The market will seek to frustrate the maximum amount of participants at all times.”
Ascribing anthropomorphic properties to inanimate indexes and stocks is my specialty, so allow me to lay out a scenario that would allow the Market to do his usual number on us all. It goes like this…
Amidst the calls from bears to melt your grandparents down for their gold fillings and the proclamations of the bulls who will latch onto any obscure survey to announce a V-shaped recovery, what if we simply did nothing? What if the tug of war made it so that neither camp could claim victory as a range bound market succeeds in his mission to frustrate the maximum amount of participants?
Now that everyone is an “expert” on the Macro, how hilarious would it be if the micro became profitable to follow once again? Wouldn’t it be ironic if our collective obsession with the Baltic Dry Index and the dollar/euro ceased to matter as much as the bottom-up stockpicking that no one even bothers with anymore?
A sideways tape with specific winners and losers would indeed frustrate the maximum amount of participants. So let’s root for it.