The Ignorant Investor

The news out of Japan is that the Nikkei is down almost three percent today. It's sure to provoke comment (why else would I be commenting on it?), but if you look at the chart for the past year it's no surprise. It looks to be up about 35-40% in eight months or so, and that's a rate of increase that begs for a pullback.

Contrast that with the Dow over the past five years, which hasn't done much of anything. I could see the Dow falling in response today, but not by much. At least, the traders aren't going to view Japan as a bellweather given that the Dow hasn't seen the same runup that the Nikkei has. What the hell- my call at 9:09 am is for a .7% decrease by close. How's that for sticking my neck out?

This news from Tokyo doesn't change anything in my portfolio or outlook. Maybe today's move signals that the performance of foreign stocks over the past couple of years is coming more in line with the American market. I just don't know.

I don't mind market pullbacks after long months of high gains. It shows that there is still caution and rationality in a market, and as long as you've still got those you've got an efficient market. Craziness and the madness of crowds makes me nervous.