Sniffed Links - Regarding Volatility

We sent out a couple of notes to clients this week addressing the current market volatility. Here was the latest one…

Ralph Wanger, who used to run the Acorn Fund, used the following analogy to describe the stock market…

The market is like an excitable dog on a very long leash in New York City, darting randomly in every direction. The dog’s owner is walking from Columbus Circle, through Central Park, to the Metropolitan Museum. At any one moment, there is no predicting which way the pooch will lurch. But in the long run, you know he’s heading northeast at an average speed of three miles per hour. What is astonishing is that almost all of the market players, big and small, seem to have their eye on the dog, and not the owner.

We expect major volatility to continue for the foreseeable future. The markets are searching for something to cling to and until it finds it we could see strong movements up and down. There are a number of things that can be pointed to as the “cause” but the good news is as of now all of these causes are fairly normal. Interest rate fears. Margin calls. Algorithms. The list goes on but the list consists of what we would call cyclical issues.

We are not going to inundate your inboxes during this period of volatility unless something fundamentally changes. Instead we encourage you to keep up with our thoughts on our [blog], [Twitter] or [Facebook ]. If the volatility continues we will post to these places more often so you can follow our thoughts.

We urge you, however, to let us know if anything changes on your end. If you are anxious or your personal situation changes then please let us know so we can evaluate your strategy.

Here are a couple articles for you this weekend…

The Stock Market Didn’t Get Tested

This is the Normal Part