- caring about what works; and
- why individual stocks matter.
Care About What's Working Posted at 7:51 a.m. EDT on Friday, June 14 All rallies are phony. All selloffs are real. Every plus-1% day is manipulated. Every down-1% percent day shows the market's true colors. That's the conventional wisdom, especially these days where the path is set in cement: Stocks must go down and rates go up because all that mattered the whole way up were the actions of the biggest manipulator of all, the Federal Reserve. Take yesterday, for instance. I hate up openings -- those big up openings on nothing but good foreign news. But down openings where everyone sees the gloom and the gloom only, those are made for reversals and that's just what we got.
Once the market reversed, Ben Bernanke picked that moment to have a conversation with his go-to guy, John Hilsenrath, in what was a master stroke moment where the bears were busy betting against the big, phony rally because the truth about rates, and therefore stocks, is now out of the bag. So, Bernanke manipulated the market, right? When I suggested yesterday that Bernanke picked a terrific time to spread the gospel that you can't presume the tapering is soon upon us, initially people were suspect. Did I believe the Fed did anything substantive? Was I that naive? Darn it all, I am nothing, if not naive. What I was saying was Bernanke has learned to play the game. He knew his words were going to have an impact because he wasn't trying to stem a decline. He was saying basically, "look, intelligentsia, I know your game, you think I am done, think again." Those who believe that he is too unsophisticated or doesn't know the impact of his words; he knows all too well the impact and he needed to undo his testimony of a few weeks ago.