Welcome back my friends to the show that never ends
We’re so glad you could attend
Come inside! Come inside!Come inside, the show’s about to start
guaranteed to blow your head apart
Rest assured you’ll get your money’s worth
The greatest show in Heaven, Hell or Earth
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For the past few decades, the greatest show on earth has been the global stock markets. The gyrations of markets make for a compelling narrative: From boom to bust and back again to boom and bust.
Welcome back my friends to the show that never ends
If you manage to survive in the market for a long enough period of time — I guess that’s somewhere in the neighborhood of a decade — you begin to notice the repetitiveness of cycles. You begin to notice the show never ends. There is a daily rhythm of the market open, the initial lift or fade, the counter rally, success or failure, the reasserting of the initial move. The midday slow down (traders gots to eat too!). The mid-afternoon move, (and at times, the terrible remorseless march of the margin clerks). Then the close. I suspect most (human) traders and quants live in the context of a daily grind.
We’re so glad you could attend
There are the weekly cycles — Monday’s excitement, the turnaround Tuesdays, the squaring of positions on Friday before the weekend. Weekly retail, unemployment, and economic reports.
Many sales people live in a weekly context — they may get paid a monthly commission run, but its the weekly rhythms that define their schedule, their meetings and sales. Brokers, Institutional Sales, Mutual fund hawkers, even Bloomberg terminals sales people are weekly.
Come inside, the show’s about to start
The monthly cycles are an entire different animal. The big economic data points are out monthly: Non Farm Payroll, GDP and revisions, Inflation numbers like CPI/PPI. Absolute return strategies get measured monthly. Hedge funds and others report their gains/losses monthly. Indeed, hedge fund mangers and Economists live in an environment of a monthly data cycles.
guaranteed to blow your head apart
The quarterly cycle begins with earnings. Pre-announcment season, the early warnings of misses. Then the earnings parade begins. The 60% average beat rate, the surprise misses, the understated expectations game, the folly of forecasts. The post mortem: How many companies beat? By how much?
CEOs, CFOs, accoutants and Analysts live in a world of quarters.
Rest assured you’ll get your money’s worth
As the earth makes its annual sojourn around the sun, we see a steady cycle of key factors: Year end contributions to tax deferred accounts, Christmas shopping, bonus season. April 15th. The school year, Sell in May, the dangers of September and October.
Strategists, mutual fund managers, retailers, compensation consultants live on this annual cycle.
The greatest show in Heaven, Hell or Earth
The secular bull bear market cycle, with its cyclical counter points, has become the greatest of all these shows. Its too long of a period to comprehend as a first hand witness — the many intervening cycles prevent you from feeling it.Its not the sort of thing you sense or intuit, given the extended frame of reference. But you can comprehend it intellectually. You can learn about the longer cycles from history. Its in the charts, its within the data.
If you ignore the secular and cyclical, you will miss the greatest show on earth.
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And today? Its a Monday . . . and the show must go on . . .
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