Markets Need to Be Good

In our favorite market descriptor this morning, a quote from the AP notes, “You can only be less bad for so long before you need to be good.”

Brilliant.

Seriously. We’re not kidding. Too often we hear financial analysts, pundits and money managers utter non-sensical gibberish that can barely be understood by finance geeks, much less real investors. It’s refreshing to hear analysis this clear.

And it’s correct.

We’ve been following AIG’s rise and fall over the past few weeks and the striking absence of real earnings support has been an item that’s troubled us. How can a company that’s marched upwards because it’s not going under just yet more so far without earnings?

In other words, it needs to start being good.

We’ve gone from green shoots, to recovery, to rally, to the realization that while things are much “less bad,” it doesn’t make them good.

Maybe that’s the reason gold started to become popular again. It’s been flirting with the $1000 mark for a couple of sessions, and traders are considering the possibility of it moving through it’s $1030 record.

But don’t rush to get into gold too quickly. Even if it does move higher, it’s not going to move high enough to justify the risk that it will fall 20%.

• Making Money from Dead Shoots
• Why Financial Earnings Leaders Means Bad Times Ahead
• Markets Fooling Themselves?

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