Back in the late 1990’s, my friends LOVED the stock market. We weren’t elite, we didn’t have much money, but we loved talking about stocks. I had friends who were obsessed with $CSCO $DELL $MFST $INTC etc. They would watch their growth stocks go up, talk about how hot Maria was (and still is), and they simply enjoyed the stock market. I even had some friends who ran $10,000 into $500,000+ trading options in $YHOO $AOL and all the other high flying internet companies. In fact, one friend made $1M in ONE DAY trading $QCOM options! He was going to take us to dinner that weekend, but unfortunately, he lost most of it the next day.
Today, no one cares. These same friends have way more money than they did coming out of college and still…they don’t care. When I get excited about the stock market, or talk to them about stocks, they ignore me and change the subject.
To me, this is the main reason driving the stock market higher: A COMPLETE CHANGE IN INVESTOR PSYCHOLOGY. It is UNBELIEVABLE how many people are not only apathetic about the stock market, but HATE it with a passion! Yes, there are bulls out there who are on margin, but I’m not concerned about them because they never sell. I hate to say this, but they will blow up just like my friends did. Why? Because they rarely take profits on the way up (in fear of things going higher) and they rarely sell on the way down (because God forbid they ACTUALLY take a loss???!!!).
Getting back to the reasons why my friends and the general public hate the market. Well, you all know the reasons, so I won’t bore you with them. What I really find interesting is that I’ve been seeing it more and more among investment professionals. They continue to stay underinvested, short this market, and complain about it going higher. I think this attitude and psychology will continue to keep this market going higher…much longer than people expect. Good luck trading!
I can be reached at: jfahmy@zorcapital.com.
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