While I respect and use the “bullish sentiment” indicators and, in fact, just commented on it last week I’ve also started thinking about the “herd mentality” as it applies to rational decision making.
Please do not take this as a BUYBUYBUY opus, but let’s think about where we are in the universe (see Tuesday’s post).
Starting with our spaceflight motif. I see the market as skimming along the upper atmosphere, the bottom of the ship buring red hot as we pick up speed but with the pull of gravity and the resistance of atmostphere slipping away. As any rocket scientist will tell you (and I know some), physics are a real bitch if you ignore them. So cutting the boosters, or running out of fuel, when you still have .001% of the Earth’s gravity to fight off may feel good for a while and you will float – but you will also EVENTUALLY, INEVITABLY experience ORBITAL DECAY!
So here we are in our shuttle craft and the thrusters are easing off a bit and we’re starting to feel a little weightless and some people want to get up and mess around but some people are still clinging to their seats, still thinking we could come back down at any minute.
Now the physicysts (analysts) are debating whether we can coast into orbit or do we need more fuel and, as you can tell from the padded walls, it’s a well known fact that gravity can catch you by surprise if you miscalculate but, at some point, probably after a few people (bears) throw up – everyone may have to admit we have finally left Earth orbit.
That’s where I see us now, right at the outer end of Earth’s gravity well, ready to head off into space on a quest to go where no market has gone before (Dow 15,000). It just so happens we are launching a shuttle mission this week and, while it is now fairly routine, those of us who still watch such things still get the same feeling that any bear might have watching the markets take off.
They pick a launch time, they delay it. They pick another launch time, the weather is no good. They pick another launch time, there’s a stock option scandal. They pick another launch time, Microsoft delays Vista…