Thoughts of a trader.

Last night was a big night for the markets. The darling of Wall Street, (and CNBC evidently) AAPL (Apple) had its earnings report. While I am not one for following such things, I happened to be watching CNBC while at the gym. There was a certain young woman reporting on this upcoming event, and while the markets had taken a bit of a beating over the last few days, she had a gleam in her eyes every time she talked about Apple. In fact, she could barely contain her excitement.

As she was talking, the other anchors chimed in with “Apple always surprises, they sandbag earnings”. I began to get the idea that they were somehow quietly rooting for AAPL. While I am all for a company making its earnings, I was wondering how many people were buying before the close of the session anticipating this great event.

I started to think about how often these people do this. I often will have CNBC on in the background, and luckily I don’t pay too much attention to it. But it seems over and over it’s an endless stream of bullishness. No matter what. You have analysts coming on convincing you to buy any and everything in the market. The world is a wonderful place, and all you have to do is buy stock. These people obviously lead a sheltered life. But then again….so does Wall Street. The price of stocks is a simple indication of that. My industry, construction, has an unemployment rate of roughly 23%. It’s hard to buy things to make companies profitable when you don’t have a job.

I have said before that these people are dangerous. Nobody, and I mean nobody but you are going to care about your money like only you can. These people are worried about two things: Their “friends” and their ratings. That’s it.

With their “friends”, I mean people on Wall Street that feed them tidbits of information. (Often times in order to profit.) Our news reporter doesn’t care that manager of hedge fund “ABC” is feeding him the good story and ignoring the bad about a company that the fund has a large position in, because it creates “news”, and the manager gets you, the average sucker to push the price up. He will then be the first to dump the stock out on the market, making a nice profit, while you hang on to it.

Also, one must always think about the ratings aspect. The retail trader is typically a “long only” trader, and gets whacked every time the market goes down. (Unlike you and I, who simply “go short”.) If the markets go down, some of their viewers are blowing up their accounts. Guess what? They won’t be tuning in tomorrow. The anchor is losing viewers everyday. Hopefully tomorrow there will be new blood.

As I type this, I am hearing someone talking about “11 Trillion Dollars of money sitting on the sidelines.” This is the reason the market has to go up. So many people took money out, and now it’s in money market accounts, so they need more returns, and will certainly come back. Funny thing about that: I have been hearing that for about 8 months now.

Just think about who you are listening to.