I’m not much of a tape watcher or television junkie, but I’ve had the Business News Network (BNN) and Bloomberg News turned on more than usual this week. I don’t know why really, because it has been an incredibly slow week for business news.
What I learned from watching, however, is that the interviewers are still repeatedly asking the unanswerable question, and the guests are inexplicably answering it.
The question: “Where do you think the market goes from here?” Or, “When do you think the market is going to bottom?”
The answer given: “I think it’s clear that...blah blah blah...housing starts declining...more loan losses to chew through...P/E multiples at 10-year lows...200-day moving average...yadda yadda yadda...before year-end...in the first half of next year...last week.
The real answer, or should I say the only possible answer: “I haven’t a clue. The capital markets are far too complex to be able to predict in the short-term. The outcome is as close to random as you can get. Valuation, which ultimately rules the day in the long term, is easily obscured by current news and liquidity factors. To make any investment decisions based on a short-term view is nonsensical. Thanks for having me on the show.”
The fact that the question gets asked doesn’t surprise me. It’s part of what we do. It’s like talking about the weather.
What amazes me, however, is that talented, successful, experienced professionals actually answer it.