Monday, November 20, 2017

Today's Wall Street Journal's multiple hedges

The "Heard on the Street" page in today's Wall Street Journal, 11/20/17, has five articles.  Their concluding paragraphs do not seem to bode well.  Then again, could they just be hedges for newspaper's safety or, to a contrarian, indicate the probable continuity of this rising equity market.

What follows are sentences from concluding paragraphs of these articles:

"If investors are almost all confident, there will be a lot of sellers when the environment sours."

"But for bondholders, the pursuit of higher returns is only getting riskier."

"A bubble occurs and ultimately pops when fundamental demand is misjudged and too many assets of poorer quality are mistakenly--or cynically--supplied to the market."

"Schemes to lure credulous investors tend to proliferate near market tops.  Investors should proceed with caution."

"History shows that high levels of confidence usually occur before crashes, as they did before the past two bear markets.  The confidence level is higher now than it was in either of those times."

In the last year the WSJ has become more narrowly and openly opinionated in its editorial pages, from this perspective in an unattractive way.  The license of reporters in the financial pages to give cliched conclusions seems to have been loosened as well.  It's always best to be wrong on the pessimistic side than as an optimist, at least that seems to the guiding principle here.  It does not exactly respect the intelligence of its readership, but who can judge that?  Focus on the facts, little things like operating earnings.  Writers are not analysts.

That said, there is reason as always to be watchful and diversified, but knowing that "you got to be in it to win it".


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