It goes without saying that human beings are blessed with a depth and intelligence that has no peer. Our life at the top of the food chain is undoubtedly well deserved.
Besides, where else in the world would beer, football and sausage have come from it wasn't for man?
However, that's not to say that we don't share some of the same traits of the species ranked below us. Fear is one of them. The ability to stampede is another.
That's something to keep in mind these days as you wrestle with another emotion that is ours and ours alone.
I'm talking, of course, about greed. As a group, we tend to have it in spades.
Of course, it's not the greed that is so dangerous these days as much as it is our inability to learn from it.
You see, the problem is we forget. And invariably when we do, the bad memories are the first to go. Admittedly, it's not perfect but it helps us to go on.
However, when we do that with the markets it leaves us with a dangerous blind spot.
I bring it up because a mere seven months ago the markets were doing something else entirely. Instead of climbing the wall of worry, they were going off the cliff.
And while those days may be easy to forget, all I can say is that you do so at you own peril.
The truth is that the markets can turn on dime. They are called inflection points and they happen with regularity in volatile markets like these.
That's something you should never, ever forget: Euphoria feels great, but it may also be a sign of a market top.
And while we may not actually be at an inflection point, it never hurts to take a step back and let market show you the way.
There are bears in the woods, you know.
In fact, three of them growled over the weekend, saying the markets are overvalued.
Here's the story on that score from Bloomberg...
It's in an article by Shamim Adam and Francine Lacqua entitled: Roubini Sees Stock Declines as Soros Warns on Economy
"New York University Professor Nouriel Roubini said stock markets may drop and billionaire George Soros warned the "bankrupt" U.S. banking system will hamper its economy, highlighting doubts about the sustainability of the global recovery.
"Markets have gone up too much, too soon, too fast," Roubini, who accurately predicted the financial crisis, said in an interview in Istanbul on Oct. 3. U.S. stocks may suffer a "major decline" after climbing to the highest levels in almost a year two weeks ago, according to technical analyst Robert Prechter, founder of Elliott Wave International Inc.
Stocks have surged around the world in the past six months as evidence mounts that the economy is emerging from its deepest recession since the 1930s. The Standard & Poor's 500 Index has soared 51 percent from a 12-year low in March while Europe's Dow Jones Stoxx 600 is up 48 percent. The euphoria contrasts with warnings from policy makers and investors like Soros, who said today that the U.S. economic recovery will be "very slow."
U.S. consumers are "overdebted" and the country's banking system has been "basically bankrupt," Soros said in Istanbul today. "The United States has a long way to go."
Group of Seven finance ministers and central bankers also struck a cautious tone after meeting on the shores of the Bosporus over the weekend, saying the prospects for growth "remain fragile."
"The real economy is barely recovering while markets are going this way," Roubini said. "I see the risk of a correction, especially when the markets now realize that the recovery is not rapid and V-shaped, but more like U-shaped. That might be in the fourth quarter or the first quarter of next year."
U.S. and European stocks gained today after reports showed service industries expanded on both sides of the Atlantic.
"Stocks are very overvalued," Prechter, who advised betting against U.S. equities three months before the market peaked in October 2007, said in an Oct. 1 telephone interview. "Stocks peaked in September and are back in a bear market."
The S&P 500 will probably fall "substantially below" 676.53, the 12-year low reached on March 9, he said. His projection implies a drop of more than 34 percent from last week's close of 1025.21. It rose to 1031.77 at 10:05 a.m. in New York.
Gains in the index have pushed valuations to more than 19 times reported operating profits from the past year, data compiled by Bloomberg show. That's near the most expensive level since 2004."
Something to ponder while you eye that bowl of porridge.
Related Articles:
Is the Recovery Starting to Stall?
Roubini: " Light at the End of the Tunnel"
Robert Prechter Turns Bullish on the U.S. Dollar
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