Bulls in Denial
Lots of bullish commentators are in denial about today’s bad jobs data. Some have even gone so far as to say that large-scale layoffs are proof that the recession is already over. Yes, employment is a lagging indicator, but it doesn’t lag by that much!
The bulls are also telling us that the stock market is looking past the recession. Since the bear market is already six months old, I suppose that is possible. However, it’s pretty obvious that the recession is accelerating downward. If you are a bull planning to ride out the recession, you have to seriously consider if you are missing an opportunity to sell here and buy your position back at a lower price in the future.
That would have been the smart move at this point in the business cycle during the last recession. Remember, feeding off of bullish denial is one of the ways bears are able to make money in the face of an economy that grows exponentially in the long run.
July 1st, 2008 at 5:22 pm
[...] I have been looking out for them. In one of the earliest posts that I published on this blog, Bulls in Denial, I wrote: “If you are a bull planning to ride out the recession, you have to seriously [...]