Markets, Investors and lots of Cake

~ Those Elmo cupcakes look sooo good...

This posting aims to answer a straight-forward question as well, straight-forwardly as possible so you the reader understand not just the 'Why' and 'How' but the psychological component of these creatures called Investors.

And we'll be as brief and concise as we can be.

At the moment, its -142 pts at 12,359.  Yesterday it was up until a quick downward spike at the end of session to close at a minus.  In fact, Monday was only the 2nd positive trading session in now 17 market days.

So, the question is-- why do markets keep going down?  

Answer- Uncertainty.

Investors couldn't care less if Greece stays in the EU or leaves willingly or is kicked out on its bum.  They just want to know one way or another so they can brush the region aside like dandruff off a shoulder, and continue profit-making.

It really is That simple.

Those in finance love coming up with clever phrases and witticisms.  One of them is "Buy on the dip" which means whenever the market drops say 3-4% overall, that means there's some discount stocks available and they go buy them, which causes a dramatic market spike for that day or two.

By the way, this was pretty much the Only reason Monday saw positive.

Another phrase these pieces of (fill in the blank) enjoy using is "Bake into the Cake" which means when something negative or uncertain is priced into the market, no matter what 'surprises' may occur, the market is prepared and thus can fully ignore the situation to focus on profit.

And when world leaders get together to try to solve this crisis at least come up with a Plan B, its prime motivation isn't to calm the populaces-- they feel they have enough police in bullet-proof armor wielding batons to deal with them...

Its to calm the Investors; to try to give them that Certainty.

And right now no one knows in the world of finance truly knows anything so there's no 'cake baking' and this uncertainty is driving these roaches & rats simply mad!  Which to us at A&G, is making us smile a lot lately..

Investors as word and profession is really a glorified way of saying gambler.

A man hits on a woman-- she asks what does he do?  He says "Well, I spend all day at the track betting horses and on weekends I spend hours playing poker and slots at the casino"  She automatically thinks "Loser!" and rightly so.  However, if he says, "I'm an Investor", now to her and the greater society, this same Loser has class and importance.

So its that simple. Uncertainty is making the markets go mad...

Greek elections are in mid June so that's still three full weeks away, its people want a "have their cake and eat it too" relationship with the EU meaning all the benefits of membership without any of the dues, and really no one has a clue how the vote will go.

Meanwhile, Investors want some certainty so they can 'bake it into the cake' then continue to tell the world a la Marie Antoinette to go continue eating cake..

Mmmmm.. Cake...