EC The Market Floats In A Sea Of Mines

people walking on concrete bridge over the sea

“Damn the torpedoes… Full speed ahead!"

I used this somewhat doctored quote from Union Rear Admiral David Farragut to title my final post of 2019. Back in the day (1864) the torpedoes Farragut was damning happened to be contact mines that were easily able to blow a ship out of the water. There were many afloat in Mobile Bay. This is how Farrugut exhorted his fleet to sail on, forget about the mines and attack a Confederate fleet bottled up in the harbor. The Union fleet prevailed and won the day.

In an earlier article on TalkMarkets, I asked the question: “Is the stock market today sailing in torpedo infested waters?“ (December 27, 2019)

The answer: Absolutely.
It is always sailing in a sea of known and unknown risks. Since the bottom in 2009 a legion of talking heads, pundits, the Wizards of Wall Street have been warning us about these submerged killers. For the past seven years their warnings have continued as we have marched to new secular bull market record highs. 

There are two things that worry me about this: someday they will be right (in the short-term and we get a cyclical bear market) or some day they will turn bullish, thus signaling the end of this great market run and the imminent beginning of a new secular bear market.

One of these submerged killers got us in March/April

A Covid-19 torpedo ripped into the side of our ship and did tremendous damage. The pandemic was a true ‘Black Swan’ event … a bolt out of the blue … extremely contagious in nature and very lethal. The shock was exacerbated by the usual culprits, bad market mechanics (high speed trading, computer automated algorithmic trading) and a media and punditry corps that jumped on the negative implications of the virus. They never had interest in providing fact and perspective to the already spooked market. Their interest was focused on gaining and keeping your attention, not your pocketbook.

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Disclaimer: The information presented here represents my own opinions and does not contain recommendations for any particular investment or securities. I may, from time to time, mention certain ...

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