I've watched with incredulity at investors' recent knee-jerk reactions to the Fed, oil supplies, and, yesterday, the PPI and core inflation numbers.
Each day is just a day, after all. A market full of mostly inept, mediocre investors behave as a herd, simply meandering without much coherent long term thinking.
Was it not just last week that, after a six week buildup, half of the pundits warned us that Bernanke & Co. have gone to sleep on their anti-inflation watch? Now, the inflation numbers do appear headed in the 'right' direction, after all.
Ooops!
But, wait. Growth is slowing. Yes, that's right- the business media has been harping on this for weeks. So, wasn't it surprising that recent retail sales numbers are actually pretty good? That wasn't supposed to happen, according to, once again, many pundits.
So.....growth actually does look good, with slowing inflation. Instead of the other way 'round. Maybe Larry Kudlow is right after all. This has been the 'greatest (economic expansion) story never told.'
Thus, we maintain our investment horizon as something more in keeping with the cycle of trends in performance, not investor reactions. Investor reactions are so easily, frequently and violently affected by misinterpreted news, that it seems futile to us to try to adjust to each new piece of daily news.
Instead, we focus on long-term performance and market trends. It has served us well in the past, and continues to aid us in being in the market for big moves, taking advantage of trends which support our positions.
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