Having read his column for over 15 years, I can tell you definitively that Alan Abelson is at his best when writing on a Friday afternoon during which the market is in its classic summer lethargy give-up mood, which is exactly what transpired at the end of this week. Somewhere between Schadenfreude Street and I-Told-You-So Avenue, Abelson finds his home turf as a market commentator – I go straight to his page on weekends like this one.
Here he ribs the bulls who’ve been using bad news as their cue to add even more exposure over the past month…
The bad-news bulls are back! Every newly uncovered scandal, every morsel of hideous fraud, every fresh revelation of bank mischief and regulatory lapse that normally would make investors’ stomachs churn instead seem to conspire to embolden them to buy equities.
We’re talking here about the same investors who it feels like only yesterday were horrified at the notion of sticking so much as a toe in the market, all but paralyzed by the wounds inflicted by the Great Recession and its progenitor, the financial crisis. Suddenly, they’ve begun to act with an urgency that bespeaks an uncontrollable and a virtually inexplicable compulsion to get in at the top of what for all the world looks like a cyclical rally.
I definitely see some of this activity going on. Abelson explores the obvious negatives in his piece and decries our inability to sell the market off down to levels at which bears will feel satisfied that the negatives are being respected.
The one thing he forgets (or leaves out) is that the world is waking up to the fact that there aren’t any other alternatives. That’s how you get Intel, IBM and Qualcomm reporting not-so-great earnings and then rallying 5%+ the next day (happened on Thursday). Because in the battle between weak growth and tepid returns versus negative real rates of return (bonds), guess what wins over the intermediate-term…