Today is a perfect example of how crazy it is. Greece is like, “Hey guys, our government may explode. We don’t want to leave the Euro unless you overhear us whispering in the background as to how bad our future looks if we don’t default. If we are going to blow up, wouldn’t it be more fun and enjoyable if we take down some others with us? After all, allowing us to become so over-levered was your fault, not ours…”
ECB big cheese says, “Intensified risk of economic downturns ahead” which is a politically correct way of say, “Holy sweet Mary and Joseph, take cover because we really screwed up and the ship is sinking. But I’ll cut rates by .25%!” And markets scream, “PARTY TIME!” Yep, makes perfect sense… WTF?!?!
Before, long term investing was holding things for years. Then long term investing was anything greater than 1 year and 1 day so you get LT cap gains treatment on your 1040 tax return. Then long term investing was a couple of months (which required incredible patience). Now long term investing is holding firm through the morning session unless the Financial Times runs a new headline.
And some of my clients are like, “Why aren’t we fully invested and sitting on so much cash. Don’t you know I need gains? I’m already underfunded for retirement, you told me so yourself!?!?!”