Buy Only When You Feel Like Puking

Over the weekend we have had a few comments from a couple of Fed members, with San Francisco Fed head John Williams saying that the decision to raise or not was a close one, with the U.S. job market at full employment. However, worries about global growth and the shaky financial markets across the world led to the Fed hitting the pause button for now. 

Some pundits continue to point to booming auto and retail sales, a housing market that could almost be reaching a new bubble and near-peak employment in the U.S. as signs that all is well here at home.

However, riddle me this? Is the reason consumer confidence is high here at home that many average /main street/retail investors have long been blown out of the water as far as the markets are concerned, and thus a troubled stock market  (not just here at home but across the globe) does very little to affect their outlook or current spending patterns?

Our markets continue to be manipulated by machines/bots/algos that bang away or buy up futures with a few tens of million and set the pattern for the day, higher or lower. Some of the intra-day moves are truly head scratchers to say the least -- and don't let the pundits tell you that it is normal. It's anything/everything but normal. 

My advice is, don't listen to gurus spouting either extremes. Let the perma-bears head for the hills, pundits shout and scream about the end of the world and scream their "repent investors" mantra, and also let the crowd/the always good crowd on the other end scream their "buy" mantra. 

In fairness, the latter are far and few between. Not many out there are advocating equities at the moment, and that might actually be a really, really good thing.

Stay patient and buy when you feel like puking and sell when you feel like you are a genius. That's the easiest way to make money in a market like the one we are currently in. Buy the extreme negativity and sell when they are out talking about how much money they made on their recent long picks. Simple and silly as that may sound, give it a try. You might just surprise yourself.

China will release its August manufacturing activity data on Wednesday and that will be a data point watched very carefully by investors globally. A few investors are still hoping against hope that China can continue at least its 7% growth in GDP per year going forward. Given what we have seen thus far, I think somewhere less than 6% for 2015 is more likely. Of course, the Chinese authorities can just put out a 7% or 7%+ number if they choose to, and none would be any wiser.  

Original Link
http://realmoney.thestreet.com/articles/09/21/2015/buy-only-when-you-feel-puking