A few months ago radio megastar (and megalomaniac?) Rush Limbaugh famously said he hoped to see Obama fail in his role as president. He was widely chastised for it and rightly so. The dictates of honor and class don’t allow for such vitriol.
I recognize that the stock market is not the same as the office of the President but there is a very loud chorus of market watchers out there right now expressing a very similar discouragement of the current rally in stocks to that Limbaugh expressed towards Obama. “I hope the stock market fails,” is now the unspoken mantra of many market pundits and amateur traders alike.
There are many different reasons, obviously, for the continued pessimism. Bears want to see their ultra-dire fantasies become reality so they can say, “i told you so.” Bulls want a pullback to give them the opportunity to make purchases they were too scared to make a few months ago.
Politically, there are the Limbaughs of the world that would like to see the stock market validate their negative assessment of the administration. There are others who would like to see a bit more economic weakness to spur another round of stimulus spending.
These various justifications, however, are beside the point. The majority is still widely negative and that continues to give me hope. As I’ve said before, quoting Bob Dylan quoting Abe Lincoln, “all the people can’t be all right all of the time.”
In the spring of 2003, the beginnings of the last bull market in stocks, it seemed the market was fueled by skepticism as it rallied nearly 40% from its lows without a single, significant pullback.
This rally has the same feel to it: fueled by skepticism. The crowd may, indeed, get the selloff it’s looking for but I wouldn’t count on it.