Markets thoughts and illusions
The panic out there continues to escalate and the markets have sold off again today.
Do I need to do the “Who’s more scared, the bulls or the bears?” poll right now? Are there any scared bears out there at all any more? Are there any confident bulls out there at all any more? The markets will fool the most amount of traders the most amount of time it can, especially at market turns, as any bottom and any top always is.
On a similar note, I actually forgot to make my main point earlier about MNST vs. AAPL in that prior post about how MNST trades at 20x forward earnings even as it is seeing its very competitive business under legal assault while AAPL dominates the largest end markets in the history of the planet but trades at now less than 7x earnings when you include that net cash. My main point was that last night MNST reported a horrible quarter and guided lower and will face a litany of legal and PR issues over the next couple years at least — and yet the stock is FLAT on the day and over the last couple weeks even as AAPL has crashed 3% today and 15% over the last couple weeks.
Crazy and not something you can game in the near-term, so don’t even try. I’ve seen many a hedge fund blow themselves up by drawing a line in the sand on both longs and shorts believing that,like Keynes, the markets would reward their rationality. It doesn’t always work out that way, especially in the short-run.
Stay in the game, folks. These are the times that drive out the losers. Things are not always as they seem until you get the full perspective.
