Reading a respected financial blog today, I came across this gem in the comments section of a post on Apple, which currently has a P/E of 55. Somebody identifying himself as "stock guy with a big mouth" noted:
apple's cheap. stock goes to $100 and then another stock split...HANS and MIDD are two others I'm convinced will split inside the next 90 days...All three are growing rapidly and have astonishing growth ahead of them.
This is typical of the financial blogosphere. The one quality that most seem to share is certainty. Every time I read something like this, I'm sure at least one of these blowhards must be right. I just don't know which one. Nor do I know which ones have bought stock and are clumsily trying to prop it up by drumming up interest in blogs targeted at market professionals.
Everyone has an agenda in the blogosphere. Many of the better bloggers are giving an honest opinion. Some may be making a downright dishonest to pump up a position they hold, but mostly people write as part of a purely psychological mechanism. People declare their market calls so strongly that one suspects the point is to convince themselves that they're making the right bet. They might not even realize they're doing it. A lot of money is at stake, and in our society money is the key to a comfortable life. People need some way of carrying the load when they start taking on risks, whether in a stock trade, a big debt, a new business.
I guess that means I must have an agenda, too. Only I don't know what mine is. Expressing a quiet frustration at my own failure to make millions playing the market while trying to subtly persuade myself that there's nothing wrong with decent, solid returns? Hmm. Sounds about right. I'll go with that.