Monday, October 12, 2009

Climbing the Wall of Worry

Here is an image of the cover of Time Magazine's latest issue. I don't think it has any immediate implications for the stock market's trend over the next few weeks. But I think it does accurately reflect (and reinforce) the public's current attitude towards stock market investing. The stock market turns people off - largely because of its very negative performance during the panic of 2008.

This cover story reinforces my conviction that the "wall of worry" that the stock market climbs during a bull market is a solid one and extends much further upward from here. We won't see covers like this one near the top of the current bull market. This top is not likely to develop until late 2010 and I think it will return the Dow and the S&P 500 to within whispering distance of their 2007 high points.


  1. Carl,

    Pretty bold statement. I guess time will tell. If anything, I see the market grinding higher or sideways at best.

    We'll see how the market responds to upcoming earning news.

    Frankly, I see corporate cost cutting improving earnings but little in the way of growth or upside guidance. Consumers are not in the spending mood, unemployemnet continues to rise and those left with a job are having their work hours slashed.

    I'm not sure what cataylst you're seeing to drive the market higher. The Feds have dumped so much liquidity into the market and kept rates low but still banks are afraid to lend.

    Just my op.


  2. Carl - your book was a delight and reinforced many of my suspicions about news headlines. i am wondering if you had any thoughts about the way Gold and/or the US dollar has been handled in the media over the last month. On several occasions, Gold has been featured as a prominent headline on Drudge Report (a distinctly non-business audience) as well as the NYT. Have these headlines made it into your journal?

    many thanks.

  3. Adam, I've started to see more references lately in the media to the weak dollar again, and toward the gold price continuing to rise. In fact, Saturday Night live actually ran a skit about gold apparently. I saw this mentioned at, where there are also some good articles on the relationship between the gold price and the U.S. dollar, especially due to the Fed's money printing efforts to try to prevent deflation.

  4. Something I do not understand: If the market is not going to top out until late 2010, why did you sell all your long positions?