Long suffering Weekly Recon readers know of my fondness for the 1980s. One of the most memorable commercials from that era was the Pantene shampoo commercial where the unforgettable Kelly LeBrock breathlessly says, ”Don’t hate me because I’m beautiful.”
I always got the feeling that not that many people hated Kelly LeBrock.
Of course the commercial was ridiculous because human nature is to be drawn to beauty and to appreciate beautiful things. We all strive to make our homes, offices, cars, and even garages as inviting as possible.
“Oh yea, so what about things like modern art, punk rock haircuts and grungy fashion outfits”, sneers the peanut gallery.
True, some say those things are beautiful, but deep down they are more about rebellion against human nature than anything else. Even their most ardent supporters will admit that when pressed.
True beauty is not really about masking things but rather more about revealing them. Beauty is in a sense…..truth. We are drawn to people and things that we believe are genuine.
In our business most people prefer the straight shooter over the shifty politicized manager. They may not necessarily like, or agree with, what the person has to say but most of us find significant comfort in knowing exactly where the other person is coming from.
On the other hand when people encounter managers that are less than genuine, there is a significant discomfort even if the message seems logical on the surface.
It’s in our human nature to identify things that don’t seem to be as they are. It could be ingrained within us as a survival mechanism from our more primitive days.
Which is probably why retail investors are so wary as of late.
Many have commented that one of the most beautiful things to experience is a secular rising or bull equity market.
So why are so many people saying that the current bull market is one everyone loves to hate?
Simply put?…Because the beauty is not genuine.
The chart below shows quite clearly that the current bull market is almost entirely the result of Quantitative Easing (QE) by the Fed. Yep, the easy money that has been available since 2009.
If the above chart left anyone in doubt, let’s follow it up with an even simpler chart courtesy of zerohedge. In the spirit of the 80s we have added some explanations referring to another famous commercial:
The Venus flytrap lures insects with sweet smelling sap only to suffocate them and over the millennia predators have camouflaged themselves as seemingly harmless objects such as grass or logs.
Many believe that the current bull market is a chimera and is simply beckoning the unwary to buy in only to summarily close its jaws and swallow any invested capital.
Perhaps the Pantene commercial was so successful due to the undeniable beauty of Ms. LeBrock. The corollary conclusion might be:
No Mr. Market we don’t hate you because you are beautiful, we hate you because you are phony.