The Street Sucks

Posted on 03/03/2009 at 8:28 pm by JumpyPants

The president was exactly right today when he said:

“The stock market is sort of like a tracking poll in politics. It bobs up and down day-to-day. And if you spend all your time worrying about that, then you’re probably going to get the long-term strategy wrong.”

The stock market is guided by spazzy white guys in lower Manhattan, and a great many of the spazzy white guys are short-sellers (the worst of the worst) who literally make mountains of cash when the stock market fails — a process that helps to drive prices lower. Some days, economic indicators might be bad, but the market goes up. It’s all emotion and knee-jerking and inexplicable mayhem.

Chasing the stock market is Jim Cramer’s job, but it absolutely shouldn’t be the president’s job.

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  • http://www.osborneink.com Matt Osborne

    Note that Obama did NOT make a generalization, such as: “I don’t pay attention to polls.”

  • Alan4s

    I saw Cramer on TeeVee this morning. Someone commented that the President is making decisions not for the benefit of Wall Street, but for the country. Cramer responded angrily that “right now, Wall Street IS the country!”. He tried to justify this selfish attitude by saying everyones 401K is invested. What a douche.

  • GIthePotato

    >>short-sellers (the worst of the worst)Hey! What is wrong with short selling stocks that you don’t own to make a huge profit and lower the value of “Nana’s” retirement fund.FUCK OLD PEOPLE!Short Selling should absolutely be illegal. Think about it. If you are say, “GE” and investors are driving your stock value down, what could possibly go wrong?Lay offsNo smart gridApocalypse

  • AdyLeigh

    Alan, thanks for explaining that–filled in some blanks for me and explains his Hardball rant too.I do contract finance and accounting work, but I worked in the investment industry for over 15 years. I invested money in annuities for approx. 3500 golf pros across this country through Slazenger Golf USA and MassMutual. Talk about spazzy white guys!I keep tryint to tune out so much of this stock market fixation, but I can’t look away from it. I wanted to be awake to see what would happen with the Asian markets this morning, for crying out loud. It’s like rubbernecking at this point with me.

  • GIthePotato

    Ady,Got any tips for a young man just starting out?

  • eve

    “Got any tips for a young man just starting out?”Never listen to the any of the wall street pushers on TV — like Cramer. Don’t even watch CNBC.

  • rogect8

    I agree with almost all of this post…but for the life of me, I can’t figure out where all the hatred towards short selling comes from. Can somebody shed some light on this for me? (I preface these comments by noting that I’m pretty sure Bob was just talking about people who engage in widespread short-selling during panicked markets; my comments speak more to the extremely negative treatment that I’ve seen given to short-selling on a more general level.)If you take a long position in a stock, you’re making a bet that its value will go up.If you take a short position in a stock, you’re making a bet that its value will go down.Either way, you’re just making a prediction as to what a stock is going to do over a given period of time, based exclusively on your assessment of that company’s future. What is the difference, other than their opinions of what the company will be worth in the future, between people taking short positions and people taking long positions? Perhaps a nice anecdote will be useful:I know several people who took short positions in Yahoo when it was hovering near the 100 range many years ago. They looked at the rampant speculation that was going on and driving the stock price up WAY beyond what Yahoo (and pretty much all tech companies) was actually worth, and they said to themselves – “Holy shit, this is getting out of control. Yahoo simply is not worth nearly this much money, and there is no way that this surge in the stock price can continue. Yahoo’s actual business has not changed one iota in the past 3 months, and yet it’s stock price has more than tripled!” Their assessment turned out to be correct – the stock price eventually bottomed out around 5 bucks. Now the market assess its value somewhere in the teens.So my question is – why the sense of disdain for the prudent investors who actually took the time to do their homework? And the reciprocal question – why the pity for the dumbasses who, through their own short-sightedness, carelessness, bandwagon mentality, and speculation, drove the price up WAY beyond its actual value?Yes, I understand that when short sellers make money, a lot of other people lose money (although, of course, the reverse is also true)…but drops in stock price aren’t caused by short-sellers. Granted, short-selling can be a fairly accurate predictor of future drops in a stock’s price. But if anything, that’s because a lot of the people who venture into short-selling are sophisticated investors whose assessments of a company’s value are likely to be fairly accurate.Can it cause a market problem to get worse? Sure, sometimes. Does it cause the original market problems? No.Anyways, anyone care to shed some light on this for me?

  • AdyLeigh

    GI, of course I do, just ask. It’s tough out there right now, and I wish I could force myself to look away from it sometimes. But it IS endlessly fascinating.

  • http://manifestpolitics.com manifest

    Yep, you got it!!