NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Among the posts this past week were entries about the perils of relying on price momentum and the Chinese credit bubble.
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Price Is What You Pay, Value Is What You Get
This week is an example of what happens when everybody is in the pool and Mr. Market climbs a wall of complacency.
Hopefully, the same talking heads who have been (confidently) uber bullish now turn (confidently) uber bearish.
With some exceptions, remember some of those talking heads are a mile wide in their knowledge but only an inch or so deep. It is the nature of those who are spending most of their time pontificating in the media, as there is little time in the day to do the real analytical work.
As we often learn, relying on price momentum as a predictor of future stock prices (the charts) can be a recipe for success or disaster. To me, fundamentals are the truth -- less so price (over the intermediate term).
Past prices/charts tell us where stocks have been, not where they are going.
Another lesson is to be skeptical of those of a self-confident nature who actually believe (and lead you to believe) that there are well-defined risk ranges, moving averages, fractals and special sauce that give them an upper hand in future stock price direction.
I fully recognize that the only certainty is the lack of certainty (whether it is in the fundamentals or in technicals) -- a good lesson of this was learned this week.