Years ago, I never thought I'd be sitting here with the experiences in financial services and media that I have had through the years. I actually thought that culinary school was in the cards, or some other profession that demanded intense performance on a daily basis. The majority of the experiences for this positive, happy dude have been wonderful, and I learned the ropes in all facets of the business from true bright minds.
However, when looking back, there have always seemed to be periodic bouts of oddities. For example, there'll be some mean and nasty email from a person sitting in their parents' basement, seeking a double-bottom chart pattern and swearing they are experts on politics after reading a free, five-page local newspaper. After asking around my circle of friends yesterday, and recalling periods of stress in the stock market that caused a general attitude shift among humans, I think an unscientific indicator on stocks I will use from now on is the "Mean-and-Nasty Email Indicator." Perhaps Foursquare or Google (GOOG)
will develop an algorithm to track psychological changes being conveyed through an email, but for now I am applying good old common sense.
So, you ask, where is the nastiness coming from at this point in time?
- Some stock was bought two weeks ago after careful evaluation, with an iota of trust thrown the direction of the bullish professionals. Today, arrows have been able to pierce the iron side of the ship named "rally."
- An investor is unable to find new themes, neither in order to profit from the next big thing or to avoid a mini black swan event. (Maybe, on that first item, some went to check out SecondMarket and purchase a few shares in the latest video sharing startup with no revenue but a climbing valuation.)
- There is a sense that others have all the information and that, more often than now, the small guy gets the shaft.
Surely there are at least 10 items worthy of addition to the list. When you boil things down, though, the rise in negativity is rooted in the type of fear in the investing process not captured in the CBOE Volatility Index (VIX). It's the fear of picking a heavily researched stock and then watching it lose 10% into the next earnings report due to something coined "euro debt risk flare."
Hey, I understand that fear and hate -- I use them as part of the bedrock under how I articulate what I am seeing in the market and within specific companies and sectors. Understand this: The market is dynamic and themes get washed ashore as quickly as they get swept out to sea. In order for you to win in a manner supported by a firm understanding of investing, there has to be a certain respect for that dynamism, and an attack plan to alter course. Don't drink Hatorade; it clouds your judgment and could hurt the portfolio.