False Information and Its Consequences

How False Information is Fueling the Insane Bull Market

Aug 30, 2024

Indeed, the proliferation of false or misleading information can significantly impact the financial markets, including the current bull market. This phenomenon, often called “noise,” can create a sense of uncertainty and volatility, leading to irrational behaviour among investors.

The bull market, characterized by rising prices and investor confidence, can be fueled by this noise in several ways:

1. Herd Mentality: Investors often follow the crowd, especially when unsure or lacking sufficient knowledge. Sensational headlines and predictions can trigger a herd mentality, leading to an artificial inflation of stock prices.

2. FOMO (Fear of Missing Out): Sensational news and predictions can create a sense of urgency among investors, leading to impulsive buying decisions. This fear of missing out on potential gains can further fuel the bull market.

3. Market Manipulation: False information can be used to manipulate the market. Unscrupulous individuals or entities may spread false news to artificially inflate stock prices and then sell them at a profit, a practice known as “pump and dump.”

4. Overconfidence: Overexposure to positive news can lead to overconfidence among investors, causing them to underestimate the risks involved. This overconfidence can lead to excessive buying, further fueling the bull market.

To navigate this landscape, investors should practice due diligence, critically evaluate the sources of information, and avoid making decisions based solely on sensational headlines or predictions. Diversifying investments is also beneficial.

False Information: The Weaponized News Phenomenon

A disturbing trend has emerged in news reporting—the proliferation of false information, and its implications are far-reaching. The most perplexing aspect of these articles often lies in their deceptive headlines, which bear little relevance to the content. Some reporters have adopted a robotic approach, persistently employing this tactic with little consideration for its diminishing effectiveness. The question lingers is whether this trend will persist or if a transformative shift is on the horizon.

This brings us to a poignant issue plaguing society today. A staggering majority, exceeding 90% of the global population, harbours the desire to maintain a lavish lifestyle despite having a modest income, particularly in the Western world. They yearn to amass material possessions that serve no practical purpose and are often beyond their financial means—all to impress individuals they hold animosity toward. This endeavour proves futile, as it merely creates the illusion of success in the eyes of those they dislike.

It is crucial to recognize that the path to true success does not involve impressing one’s adversaries. Rather, it entails a relentless focus on personal growth and continuously enhancing the quality of the products or services one provides.

The Art of Exaggeration: An Increase in Boastful Attitudes

Please permit me to wax contrarian for a moment. The trend of corporate officers seeking to enhance earnings per share (EPS) without due diligence and innovation is a blight upon commerce. Rather than exerting effort and fostering ingenuity, they borrow money at a nominal rate to purchase their shares, thereby increasing EPS by mere sleight of hand.

It is lamentable that shareholders are content with such disingenuous practices. If they were genuinely invested in the success and stability of the enterprise, they would raise their voices in protest. Alas, they are satisfied with mere appearances rather than the substance of the enterprise.

The trend of wanting more without making the necessary sacrifices is a veritable scourge upon society. The advent of negative interest rates in the US will only exacerbate this insidious tendency, as corporations will likely redouble their efforts in share buyback programs. A pox upon this mode of thinking and doing! Let us instead return to the virtues of hard work and innovation, the hallmarks of thriving and sustainable commerce.

Is the Fed playing Mind games with the populace?

Pray, don’t be fooled into believing the Fed is of a mind to raise rates with abandon. Their recent inaction, despite a single, measly hike, speaks louder than any words could ever convey. Their true aim is to follow the rest of the world into the age of negative rates. They have no choice but to continuously pump the money supply until the masses cry out, “No more!” but who can say when that fateful day shall arrive? Many who have been waiting shall have passed on before the arrival of that day.

Allow me to impart some knowledge; a superpower typically holds sway for over 250 years before being supplanted. America has held that esteemed position for just over 240 years, and if history is any indication, the end is nigh, and the time draws near for a new ruler to take the reins.

Conclusion

Contrary to popular belief, the stock market is not headed for an imminent crash. Despite the ominous predictions of so-called experts, the market will likely continue to trade at higher levels than anticipated. The Fed has shown itself to be a formidable force, and those who have fought against it since 2008 have repeatedly found themselves bankrupt.

Although central bankers’ actions may be questionable, they have already committed to a course of action that will not be reversed. The money supply will continue to be inflated, and the markets will eventually adjust to this new reality.

If the support from central banks were to vanish suddenly, the bull market would come to a screeching halt. However, this scenario is improbable. It is foolish to fight against the trend, as it is always your friend.

It is unwise to heed the warnings of those who claim to be experts but are, in reality, vastly uninformed. Trusting in illusions and dreaming of market crashes is a fruitless pursuit. Keep your focus on the trend and make it work in your favour.

In conclusion, the video below reminds us to be discerning when seeking financial advice and to be cautious of those falsely claiming to be experts.