The Reality of the Widget Salesman

Are you getting your opinions about the stock market from unbiased reousrces? Do the Wall Street cheerleaders really believe their opinions or are they just hoping eveyrthing works out?

As I sit here watching CNBC (financial television), I just stay amazed at the run away bullishness of this market. Should it be a real surprise? Just ask all of these money managers who talk about the markets on CNBC. They see nothing but clear sailing the rest of the year. Just keep in mind about the opinions of money managers.

The majority of these money managers can only purchase stocks. A bear market would be the worst case scenario. Thus, it will always be a bull market regardless of what the tape says. Besides, why would they shoot themselves in the foot and offer anything negative?

For example, let’s take the story of the widget salesman. The only thing that he can sell is widgets. Besides the money that he makes selling widgets, he also makes plenty of money as long as his clients hold onto those widgets. Well, let’s say that something happens to the widget market. Widgets lose some of their popularity. People don’t want them as much.

As a result, he will go announce that this weakness is temporary. After all, he doesn’t want to lose any current customers. Second, he will talk about what a bargain widgets are so that he can still sell them.

The take away from that story is that the salesperson can only sell stocks. The salesperson depends on widgets always being a good deal because that is his only income source.

The same applies to money managers or financial advisors who depend on stocks. Remember the opinion that you here in the media might just be desparate hope rather than a solid opinion.