Market can stay irrational longer than you can stay solvent.

Market can stay irrational longer than you can stay solvent.  -John Keynes

 

What we are seeing in the market right now is what Keynes was talking about.  Right now the market is irrational.  We have Japan, Middle East, oil, debt issues all across the World, and I am sure several other things that I am missing but we keep popping.

Why is this?

I am guessing QE is part of it.  Winning heals everything is another part.  Add in lower quantity of market participation and you get irrational.  Once again this is my guess and the only thing that I am sure of it is that it is happening right now.

How does this end?

There are a few scenarios I see happening.  Eventually all indicators/algo’s will start to produce sell signals but the market will continue higher.  Eventually everyone will puke, moving the market higher.  Or the market continues higher and attracts retail and then we get a traditional market.  IE prices start to react “normally”. Or we move lower and anyone who is short will look to cover and the buy the dip people will come in.

Once again this is pure speculation on my part, some may have already happened.  It would be awesome if you added your two cents and if there is enough response I will write something more formal.  Explain why I am came to those conclusion.  It will have little or no effect on my bottom line so the exercise will be purely for intellectual gain.  Wow I just turned into an analyst over the course of a post.  Just kidding I love you guys.  But for right now it is the weekend..

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4 Responses to Market can stay irrational longer than you can stay solvent.

  1. […] an ugly new twist on Keynes’ aphorism, it is starting to look like the market can stay irrational longer than Europe’s weaker […]

  2. […] an ugly new twist on Keynes’ aphorism, it is starting to look like the market can stay irrational longer than Europe’s weaker […]

  3. […] an ugly new twist on Keynes’ aphorism, it is starting to look like the market can stay irrational longer than Europe’s weaker […]

  4. […] an ugly new twist on Keynes’ aphorism, it is starting to look like the market can stay irrational longer than Europe’s weaker […]

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