fby Will Hepburn

Me Thinks They Cheerlead Too Much

The stock market has continued to climb for quite a while now. We really have not had a meaningful drop in the market in about 10 months and we are looking a little overdue for one.

The market has obviously been boosted by the way Washington and Wall Street are trotting out various spokesmen, from Treasury Secretary Snow to various Fed Governors, almost daily. I don’t like to be a cynic, but all of them seem to be downplaying the plunging dollar along with budget and trade deficits, claiming there is no sign of inflation anywhere, no chance the Fed will need to raise interest rates, and what not.

I am always suspicious when officials feel the need to act so defensively and put so much effort into trying to affect investor decisions, a tactic usually employed when they don’t dare let the numbers and the facts speak for themselves.

With stocks clearly overvalued (a technical term for “not worth it”) buy and hold investors, like a herd of sheep, are being nudged toward another round of bruising losses. When it will start, no one can say, but at Hepburn Capital Management we are ready for it.