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Checking Emotions at the Door

Published by cory February 11th, 2009 in Marketing Strategy.

Let’s be honest, the stock market turmoil makes great fodder these days. Feeling like we’re getting out of the woods one day leads to punishment the next. I’ve learned to just tune it out and use a few tools to guide me on where things are headed for the economy.

First, The Conference Board posts a month survey of consumer sentiment:

The trend line where the US consumer stands is more important than the single points each month. While not perfect, retail sales and consumer shopping tie into this pretty well.

I’ve also learned over time who to trust when it comes to where the stock market and the consumer divide. Even though the consumer feels better when the stock market goes up, it isn’t the only factor in driving up confidence, thus consumer behavior. Top of the list is Mauldin primarily because he doesn’t post every day, provides analysis instead of reposting of news and is not truly main stream.

I’m believing more and more that the 24×7 news cycle is creating momentum swings faster. We’re getting to the same end point, but are facing a lot more churn in the process. Turn all the noise off, watch the long term trends and stay sane.

Viewing 3 Comments

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    The foreward states, "Developments in financial markets have dominated
    the news in recent weeks. The subprime crisis that unfolded in 2007 has now morphed
    into a credit crisis that has caused major disruption to financial institutions in the United States
    and Europe. Intensifying solvency concerns about a number of the largest U.S.-based and
    European financial institutions have pushed the global financial system to the brink of systemic
    meltdown. The effects on the real economy have been limited so far. In part, this may be because tax rebates in the United States supported consumption, while strong nonfinancial corporate balance sheets and profitability have allowed firms to use their own funds rather than borrow. But neither of these factors can be expected to last for very long. Credit conditions have become significantly tighter in recent weeks, threatening the ability of nonfinancial firms
    and a number of emerging economies to raise capital. The U.S. and European authorities have taken extraordinary measures, including massive liquidity provision, intervention to restore
    weak institutions, extension of guarantees, and recent U.S. legislation to use public funds to buy
    troubled assets from banks. But it is not yet clear that these measures will be sufficient to stabilize markets and bolster confidence, and the situation remains highly uncertain.
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    Even though the consumer feels better when the stock market goes up, it isn’t the only factor in driving up confidence, thus consumer behavior.
    • ^
    • v
    Feeling like we’re getting out of the woods one day leads to punishment the next. I’ve learned to just tune it out and use a few tools to guide me on where things are headed for the economy.

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