Tuesday, April 19, 2016

Economy: The Most-Hated Bull Market In History

(Drivebycuriosity) - This is the most hated bull market in the history of Wall Street, writes USA Today (usatoday).  Since spring 2009 stocks have been climbing against a wall of skepticism and disbelieve. Since then Marketwatch, Bloomberg, Business Insider and other media platforms have   frequently published articles about an alleged immediate end of the stock gains and have been a platform for a legion of crash and recession callers  (driveby ). And the statistics show that many people missed the gains because they didn`t invest into stocks or had sold already in the recent years.

Why is the bull market so unpopular? I think there are several reasons.

1.  The bull market created many losers. Many, including fund mangers and other professionals, missed the stock market gains because they are/were to pessimistic for the economy & the company profits. Now, they are angry because they have lost so money. For years they have been waiting (hoping) for a major decline to get on the train, but that never appeared. Now they have bad feelings and the underperforming fund manager and other professionals are criticized by their investors.

2. A legion of professionals, including hedge fund managers like George Soros, have been betting against the stockmarket for years (driveby). They put their money into puts (put options) which climb with falling stock prices and fall with rising or they borrowed stocks and sold them immediately in the hope to buy them later for a cheaper price (short selling). Those people suffered high losses which have been accumulating over the time. They must be very angry now.

3. Professional advisers dislike bull markets in general (thereformedbroker). When stocks are climbing and everybody can make profits, who needs than their expensive advise? This professional claim to offer security in rough times. Who needs security in a perpetual bull market?

3. Many people are generally pessimistic and skeptical ("I am only happy when it rains"). It could be in their genes. For these people the glass is always half empty, they doubt good news and expect always something bad comin..

4. There is an anti capitalist sentiment. Many journalists - and even fund managers - don`t believe into the maret economy, they distrust corporations & dislike profit thinking and the whole economy.

It seems paradox, but the hate keeps the bull market alive because professional are under performance pressure and stocks are cheap and have room to grow.

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