“Scratch any cynic and you will find a disappointed idealist.”
― George Carlin
This week I watched one of many investor interview videos and the subject of young bulls and old bears came up. The description is not new and even the interviewee mentioned a white paper early in the 20th century that attributed the phenomenon to a simple assumption whereby the older we get the more cynical we become, all at the expense of our idealism. Well, one aspect to the conversation it didn’t touch was the matter of what constitutes old and young to begin with. In fact I see myself as too old to be an untainted idealist and too young to be a pure cynic, so I came to a conclusion about myself that has actually served me for much of my adult life, I’m a skeptic and that pretty much sums up my perspective of the markets this week.
As of last week I wrote that I remained constructive although neutral due to the recent run up in the broad indexes. The combination is based on pure skepticism, and the reason is because so much of the narrative these days points only to the stocks that represent what I call the in-home winners. And while I have much confidence of my own in those companies, there is so much more of the market that is still contingent on the outcome of data as the economy reopens and much more that unfortunately is still in limbo. With regard to the economy reopening, the unevenness of the process due to each state navigating its own strategy that drives focus more on Technology and a scattering of Discretionary companies as opposed to the more challenging outlook for those sectors of the leisure industry such as Airlines, Theaters and Stadiums and the countless bars and restaurants that will likely see a challenge returning to normal, if many return at all. For now the markets are taking a breather and in many ways volume and trading return the favor, both light in volatility. Just what a neutral skeptic likes to see.