At Joes Barber Shop

I needed some time away from my screen this afternoon to try and make sense of recent market action. I decided to take a walk to Joe's Barbershop to get a haircut. As luck would have it a retail stock broker was getting a haircut next to me.

I played coy and asked him what was going on with the market. He said that business was great and that the speculators are back. He likes Citigroup because Barclay's said they are looking for a US takeover and Citigroup is the cheapest US bank. He likes Ford because its going to be the next Toyota and he likes Jet Blue because the price is so low. I politely thanked him and wished him luck.

I have come to the conclusion that the retail investor has been giving this market the extra energy that seems to make the market keep going and going. The move in Citigroup has really awakened Joe Sixpack's animal spirits. It could not have happened at a better time, tax refund season. This certainly explains why all the action has been in the most highly speculative, heavily shorted stocks.

Joe Sixpack is not the best market timer but this is not necessarily bearish yet. What would tip me off that Joe Sixpack is about to get run over? The government could sell their Citigroup stake starting on March 16. If they choose to "Katie bar the doors".

1 comment:

CP said...

Awesome! Joe Kennedy and the elevator operator!