Do fundamentals or emotions drive the stock market?

McKinsey — the fine folks behind some of the worst financial ideas of the past 1/2 century — ask the question:

Do fundamentals—or emotions—drive the stock market?

Normally, I prefer to give the author the benefit of the doubt, and let the idea stand or fall on its own merit. But McKinsey has demonstrated such a wanton incompetance as to so many financial matters, that I simply cannot.  Enron has been called "the house that McKinsey rebuilt." I’m not sure which was worse, the financial advice, or the egregious ethics.

Regardless, they are a tainted source to me. I cannot overlook their lack of broad vision, the reckless lawlessness of their advice, and the stench of general hubris that envelopes the firm.

I can read their late-to-the-party take on Behavioral Economics, but I cannot forget that these are the financial engineers of the nation’s largest corporate collapse. 

So why bother?

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  1. CEOaf commented on Apr 6

    your site is a must read for all small retail investors – thanks for your insights.

  2. seamus commented on Apr 7

    When McKinsey tells me to book a 5-year ARM, I’ll sign a new lease on my rental apartment.

  3. Hans Suter commented on Apr 7

    dont’ forget Swissair, another victim of McKinsey’s.

  4. Jon H commented on Apr 11

    Jonathan Schwartz, of Sun, spent some time at McKinsey – it was his first job.

    Make of that what you will.

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