Bullheadedness on The Street: These guys just don't quit
It is not a sin to be wrong, the Reformed Broker tells us, we are all wrong from time to time. However, it is a sin to willfully ignore evidence and facts or to hunt down obscure data points in order to support an existing thesis.
US Federal Reserve Chairman Ben Bernanke answers questions during a news conference at the Federal Reserve in Washington, on June 20, 2012. Joshua Brown feels the recovery has ground to a halt, and isn't sure why the major analysts haven't conceded this point yet.
Jonathan Ernst/Reuters
The Philly Fed number this morning was an unmitigated disaster. A huge drop-off in new orders dragged the reading down to a negative 16 versus expectations of flat. Taken in combination with this morning's weekly jobless claims number (the rolling 4-week average is headed in the wrong direction) along with everything else we've seen in retail sales and manufacturing, we know that things have ground to a halt.
You'd think that even the most bullish and constructive on The Street must surely be ready to concede this point.
But they will not.
And so today, I recommend everyone take a moment to remember the charlatans who promised you new highs in April and scoffed at the weakening data when it didn't fit either their model (long-only, fully invested) or their political viewpoint or their pre-established, rigid thesis.
You know who they are. THEY know who they are. They killed you in high beta and in small caps and in cyclicals and in materials. They extrapolated market action from January and February and bought dips and told you about all the "great companies" that were "on sale."
Barton Biggs goes 90% net long! (March 20th 2012)
Citi: A new industrial revolution! (March 21st 2012)
JPMorgan's Thomas Lee: "It Is Ridiculous To Be Bearish!" (March 15th)
Goldman says stocks are a Generational Buy! (March 21st)
Make a mental note not to pay them even a single whit of attention going forward.
It's not a sin to be wrong, we are all wrong about different things all the time. However, it is a sin - and a deadly one in this game - to willfully ignore evidence and facts or to hunt down obscure data points (Rail Traffic! Baltic Dry Index! Magazine Cover Indicator!) just to support an existing thesis. It is a sin to remain wrong so as to avoid the admission that things are not going as you had previously thought they would.
Strong convictions, loosely held. Anything else is a death sentence.