Where There’s Fuel, There’s Fire

The stock market is the best barometer in the world for interpretting tomorrow's news.  The only caveat to that is that when the "euphoric imbeciles" have control - and you can measure that by our Psychology Composite - you stop listening to the market's message for underlying secrets until a rational environment returns.  In 1997, the market wisdom was put on hold due to those "euphoric imbeciles'" trading patterns.  At that time, the Technology Revolution was starting to come out from under the rug that had hidden its potential during the prior 50 years of gestation, which began the transition from the "birthing" phase to the "turbulence" phase.

I will never forget how Thomas Friedman, in his book The Lexus and the Olive Tree, described how the transparency produced by the Technology Revolution was going to change the world, especially the path of everything moving from the top down.  That movement created power, and power almost always creates greed.  Friedman very astutely deducted that, with the transparency provided by the Internet, there can be no secrets that don't eventually get exposed from the bottom up.

We've learned a lot in these last 14 years since 1997.  It doesn't mean that all the headlines are going to show hugging and kissing, but it does mean the evolution is well on its way - in somewhat of a similar manner to when the Dow Jones broke above 1000 for the first time to stay in 1982.  And back then, it was sending a wonderful message that produced an exciting growth in our country and our world.

Today, stronger growth is likely, because confidence is up, uncertainty is down, global growth remains very strong, fiscal policy headwinds are slowing, and monetary policy remains very accommodative.

To view today's complete Market Comment, click here.

Don Hays

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