Monday Thoughts – Money Printing May Cause This Run to Continue


Many people feel that the market can’t continue to run up and that there will have to be a second collapse. With the market up tremendously from its March low (and that was quite a low by the way), those who missed the rally are almost hoping it falls back because they are embarrassed to have missed it (these are typically people without a plan).

Nonetheless, we may have another correction but probably not before more people get sucked in. Many people who are still on the sidelines will frantically rush into the market as it rises further, fearing the repercussions from their clients of making no money in such a bull move up. When many of these folks are finally fully back in, that is, citing Murphy’s Law, likely when we fall back down again. However speaking of having a plan or not having a plan when investing, Zero Hedge highlighted a PBS series on Paul Tudor Jones (famous hedge fund manager) during 1987 before the crash of 87 – that you may find interesting. Here is part 1 of 7 – in this interview (forget which part of the 7) he specifically mentions the importance having an investment plan before one invests:

Why will the market keep rising? As Marc Faber said a few months ago, money printing is a good fundamental reason for the market to rise.  With all of the excess liquidity, which we know from news stories was likely NOT going into lending (until recently) it must be going somewhere – answer, according to Faber, is the global stock market.

With all that being said, there is a good chance that that market rises another 10-20% from here due to liquidity injections and people afraid of missing out. What happens after that I don’t know but it amazes me how people come back from a real Black Swan event and return to their previous imprudent behaviors.

Chris Grande