It appears a couple of popular news outlets and financial magazines do.
I don’t follow news outlets with a focus or interest, as any seasoned market operator worth their salt knows that intellectual independence is a linchpin of surviving the battle of the markets. However, in reality it is difficult to stay up with economic developments and to try to gauge sentiment for contrarian analysis without being exposed to a whole lot of opinions.
CNBC’s Jim Cramer suggested a Santa rally is possible and would represent a “buying opportunity”, while Forbes magazine insists that “statistically” the period of late December and post-tax-harvesting deployment of new investor capital in January is likely to lead to somewhat of a rally.
Forbes goes on to write that “there’s a good chance based on history that the final few trading days of 2022 and the start of 2023 could prove positive for stocks. That could offer a small edge if history is any guide.”
Not that I think it’s remotely worthwhile even thinking about doing what
the talking heads on television advise. In fact, a lot of people have
picked up on Cramer’s spotty record (google “Inverse Cramer ETF”). But still, many unsuspecting people watch this stuff.
A few points stick out for me – the usage of “small edge” and citing the “final five trading days of the year and the first two trading days of January”, while Cramer states that “the Santa Claus rally tends to last through January 10”.
Forbes’ and Cramer’s phrasing implies that if there will be a rally at all, it will be short-lived. Because Dec 20 to Jan 10 is barely 3 weeks of time, including a handful of days where exchanges are closed due to the festive season. Forbes’ “final five trading days of the year and the first two trading days of January” only adds up to a bit more than a week of a rally.
To me, what they say can only translate to the hypothetical that if there will be any opportunities at all, they will be of a short nature – i.e. trades..
However, the audience of Forbes and CNBC’s Mad Money is clearly not professional traders – the only people that would benefit from and could realize short-term ‘trade’ opportunities. And pros know better than to watch television or read a magazine to get actionable market ideas … in fact, they tend to fade those ideas.
The audience of these outlets consists of amateur ‘retail investors’. People, which as Forbes states, do things like tax-loss harvesting at the end of the year. Yes, they tend to hold stuff for rather long periods, years or longer.
Media outlets that offer such short-term trading ideas are doing a disservice to their audience, which largely consists of amateurs that lack expertise, experience and even inclination to trade equities in the short term.
Of course there may be a rally, but for anyone that is not a skilled short-term trader that exhibits the technical finesse, emotional discipline and mastery of position management, such advice is irrelevant — euphemistically put.
In any case, merry Christmas to everybody!
