What You Should Be Looking For

If you’ve been paying careful attention, we are seeing a shift in the media bias now towards hope.  This is VERY important, because media sentiment is an important component of what the average person on the street thinks and feels.  If they constantly hear that the worst is behind us, the market is improving, etc., that has an impact on their purchasing and spending decisions. Sadly, the average person out there reads the headlines and watches the news on TV, and thinks they’re hearing the truth.  While we know this isn’t true, the point is that the AVERAGE consumer out there picks up their cues on the market by what they read and see in the media. Ever since Obama suddenly shifted his message from “it’s ugly out there” to “I’m seeing glimmers of hope”, the media has picked up on that and begun reporting much more neutral or positive-bias news. I think in part, this is because people are so TIRED of hearing such bad and negative information.  The reality is, human beings can only withstand so much negative news, particularly at the intensity we’ve been experiencing since last year. The media understands this, and since it’s in the business of selling newspapers, it shifts to accommodate the changing needs of the consumer. If you want proof that we are all desperate for hope and something to believe in, witness the video that I posted last week of Susan Boyle, the singer in Britain.  In less than 2 weeks, the videos of her signing on the internet have been watched more than 100 MILLION TIMES.  That’s in 2 weeks.  Think about that.  Incredible! And why?  I think that normally, that video would NOT have been such a hit.. sure, people would have watched it, but the popularity wouldn’t have been anything what it has been.  Here’s why it is so popular .. the collective world is so desperate for something to believe in .. something to smile about .. someone to cheer for .. that the timing of that video was more important than the video itself. And I think these are important signals, because to me, it indicates that people WANT to move on, want to look forward, and are searching for brightness of the future. This weekend, when you’re reading the newspaper, pay VERY close attention to the sentiment, the feel and the bias that the articles take when you read them.  I think you’ll find that they’re much more hopefuly, looking for signs of positive improvement, and just generally more pleasant than in previous months. The stock market ended higher today, and that will give them good things to talk about.  Ford reported positive earnings, and the media will pick up on these very selective pieces of positive news. I am a student of psychology, and we’re living through one of the most fascinating times of our generation right now.  Watching investor sentiment swing from greed and abundance to fear and scarcity has been amazing to watch. Do I think the worst is over, and that it’s time to look forward and pile into the market?  No, I don’t.  I think we’re in for more problems, more losses and likely some bank failures and crises.  However, keep a close eye on the media sentiment because it is a barometer of the general public.  If it continues to push towards optimism and hope, we may just be able to experience a bit of a shift in the consumer.  And that’s important, because if people start to feel more confident or optimistic, they’ll start to spend money again.  And that gets the economy churning again, which is ultimately what the economy needs to start a recovery. Again, I don’t think we’re about to watch a recovery.   However, observing the psychology behind the market is not only an entertaining and fascinating show to watch, it will also give you early signs of recovery when it does ultimately start to set in.]]>