The Ignorant Investor

Okay, back from vacation. I was going to reread the Lowry interview I linked to last week before writing this post. I pictured going through it point by point while sitting by the fireplace up in Vermont, but somehow the articles never made it into my bag before I left. As far as I'm concerned, that's a sign from my subconscious. Move on, it says. Whatever Lowry has to say in his interview speaks for itself without the need for further explanation from me. I've done my duty by noting it for the record here.

The only part of the interview that stands out in my memory a week and a half after reading it is the historical description of the way market tops have formed using the falling leaves analogy. It caught my eye because I've been watching usually stalwart stocks like GE (own it), JNJ (own it), and Intel (own it) dropping off significantly since the year began even as the Dow's been topping 11,000. Could we be in the intitial stages of one of those market topping tech signals, we asks? Are the first leaves falling?

Speaking as someone who's lived through a lot of New England autumns and therefore has some familiarity with the signs of approaching winter, I can honestly say sometimes leaves drop slowly and sometimes they come down all at once in what seems like a blink of an eye. I bet the stock market works the same way, even though Lowry's description has an elegant, convincing ring to it. That something sounds convincing doesn't convince me, simply because if the most elegant and convincing theories always turned out to be true, there'd be no need for experiments and falsifiable hypotheses and all the rest of the dreary apparatus of scientific methodology. Consider me skeptical but subject to the occasional doubt on my position here.

I'm filled with doubts these days. I've been sitting on a big pile of cash as the market has pushed upwards, wondering whether the decision to wait for valuations to come down makes sense. I could latch onto this Lowry piece for support, but I'm not going to. I keep going back to my gut. Terrible idea, I know. But . . . well, I don't know. I'm speechless here.