Macro/Micro

Contrary to my comments the other day, it seems that if you have been reading this blog since the beginning of the year, you'd actually have made some decent money (LINK):

And for what it's worth, here's what happens next. The current US economic and market strength will continue at a bullish pace right up until about September/October, when a spew of economic data will show how in Q2 we got just a little ahead ourselves. This, combined with some instability created by a looming election, will prompt some of the big pension funds to throw money back into gold, and it will have a natural, short-term correcting effect for markets (which in all probability probably won't be needed so it's a time to buy then). However, because of this overreaction, we'll probably see that growth re-bound in the final quarter of the year as Q3 fundamentals show everyone that things are actually still in pretty good shape.

And while the Japanese may raise rates, as might China, don't expect too much discipline from the governments of these economies. When Asia has a run, she's usually more afraid of stopping that run too quickly than she is of letting it overheat, so though she might put in a quarter-percent rate hike here or there for show, it's not in keeping with the general ethos of the region, which tends to get a little overexcited about its own economic prospects (usually as a result of knock-on growth from the European region and the U.S.A.) In other words, right now, you want to be buying Japan.

The Nikkei shot up to over 18,000 after that comment was made. Japanese equities look good again right now, with the Nikkei up more than 10% on the month to 16,845.96, and the yen seems to have regained regional stability. And - surprise, surprise - the Dow is back to an all-time high (I said that HERE recently too).

One of the side-effects of globalization is that everyone seems to use Macro- data to judge what are, in effect, Micro- situations, like market movements. It's an information overload problem, and it's not always an accurate way of trying to gauge where stocks are headed.