Followers do little to themselves; they mostly contribute to the winner’s kitty. Investors who wait to see the right signs all around them mostly end up being followers. By the time the media turns bullish, valuations would have run up substantively. Watching business TV has many downsides. But, the worst damage it does is to stop you from thinking ahead of the world. The din and noise model of television simply freezes independent thought. So, investors never learn to anticipate. Instead, they react to past events just the way TV programming does. This freezes decision making most of the time and your investments inevitably pay the price. We see people getting ready to pay that price soon.
Market turnarounds have a way of surprising you. First, it will appear that everything is wrong with the world of money. The economy will look hopeless. Your currency will look weak. Inflation will be uncontrollable. Interest rates will be close to their highs. Crude prices will be peaking. Headlines will be bleak. No news will be good news. The markets will look like they are about to crash any moment. Then, suddenly, one of the variables will change dramatically. This leads to a chain of events where the other variables start to look up. Gradually, the fear element will leave each domain which it occupied. Crude, commodities, currency, inflation, interest rates and economic data will all sequentially look up. Suddenly, the headlines will change. The stock indices will look up. Money will keep coming into the markets fueling a sequence of positive events. By the time you realize it, the stock markets would have risen significantly. We have described this in a racy way. But, the events have their own way of playing out. One thing is true; every bull market is born out of an extremely pessimistic state. This one will be no different.