When your job is to write a commentary about the stock market you start with a blank Word document. It stares at you and says, “Come up with something noticeable that makes sense of the market.” Right at that moment, the inception, you can go either way. You can detect a pattern that points to an absurdity, let’s say a warning about a two-track bias, one with light volatility and the other with craziness. Or perhaps a simple jeremiad flagging a dangerous oddity of mega-caps versus non-mega-caps that bemoans, or worse, causes worry that might tempt people to “get out now.” “Get out now.” That’s an ill-advised warning I penned in my “Wrong” column for TheStreet.com, the business website I co-founded, warning readers of impending doom after we had had that doom. That past was at noon ET on October 8, 1998, oh so many years ago. Everything you write online can and will be saved and used against you. I wrote that commentary in a moment of weakness that day, within minutes of the bottom of a painful bear market, a forever-flagged searing panic tattooed to my temporal lobe. It’s an instructive, visceral moment, born on the trading desk of Cramer & Co., because Karen Cramer, my now-former wife, the best pure trader on Earth at the time, sitting at my seat at the top of our U-configured desks, catalogs in hand, watching and waiting, dispatched me for a hot pretzel and a Diet Coke. Once I had gone on her mission, instead of getting out of the market, she borrowed a billion dollars, far more than we had a right to, and put it to work. Her firehouse of money struck the market at its absolute bottom minutes before the Federal Reserve issued one of those “any liquidity necessary” bulletins that obliterated the bear for good, followed immediately by the interstitial fire of short covering born of panic making sure that darned thing was slain. The whole thing occurred while I was at the corner of Water and John Streets in the financial district of New York City, slathering mustard and wiping my hands of a bright yellow spill. I had been weakened by months of ursine saturation bombing. It was an ugly moment. Her strategic pivot made our year. It was a humbling bet against what amounted to us, causing me to hastily change the “get out now” to something akin to what she was doing. But it was too late, the damage had been done. I bring up this mortifying moment because it reminds me of what happens if you write to extreme. If you put pen to Word, as it were, and issue an equivalent of “get out now.” That’s when you write to fright, forever warning all about the hazards of a moment when the mega-caps could bring down the market, or of the dominance of a few stocks versus the sluggish path of the smaller, $100 billion cap brethren. Yes, there’s a corrosive jealousy that lingers heavily when I read these pieces, of which there was one in the paper this weekend, no need to flag the siren by name, but it was there alright. So many journalists take advantage of the right to fill that blank page with warnings that amount to “get out now,” without the consequence or a post-mortem. How I wish there was an editorial coroner that forever labels a piece as “Wrong,” as surely as my unhedged warning posted at the bottom of the bear market of October 1998. Why analogize now? Maybe after a historic run from the bottom to the top, I have read so many of these pieces which ended up as nothing more than defective bricks in the wall of worry. It’s a journalistic wall that’s noted and often acted upon. Acted on because of its rationality, as in “holy cow I had no idea how narrow the market is,” or “I can’t believe that Nvidia ‘s behind so much of the run.” These amount to abandoning the wall rather than scaling it, and have kept you out of so many points, hidden in the 5% sidelines that feel so cozy. I hate these pieces. What should be written then? How about a hedge to the thesis, something about how things could go right, perhaps during the time it took to walk from the office to John and Water Street all those years ago? Something like “the narrowness could be a reminder of so many past bull markets, where other stocks joined the resting leaders and broadened the market.” Or even better how about “10 stocks that could go up next” not with a quote from some money manager or two but from the journalists, themselves? So many of the “get out now” pieces are the musings of the journalists, while the rare bullish pieces are couched with Panglossian money managers justifying the run. I hate those unaided proclamations. You see, this market rally has been based on the narrowness of itself. But that means nothing. It could simply be a precursor of something bullish next. It could preface a changing of the guard. It might be a screed full of sound and…
Read More: Bad market call 25 years ago reminds me to look for what can go right