Macro vs Micro
I have been investing since I was 5, but really only got into it around 2 years ago. A trend I have noticed:
Macro numbers come out. They are terrible. Unemployment is bad, housing is bad, everything is bad, production is bad, our debt rating is bad, china is bad, europe is bad. etc. The market plunges quickly. Then, a lot of companies report good earnings, and the market climbs back up.
Two things: 1) Earnings are the only thing that matters to stocks, fundamentally, even though macro matters to wall street. So I think the right play is wait for a macro crash, and buy before earnings season. 2) How is this possible? How can the economic numbers be so bad always, but earnings keep increasing and beating estimates. I cannot explain this at all.
I would like to say though, that I don't care about employment at all. Unemployment is pretty high compared to average over our history. I think it is a stupid number though, because 1) women work now too....I bet the "unemployment rate" was over 50% 100 years ago if you included women 2) we don't need as many workers, we have computers. 3) I would rather unemployment, than employment in house flipping, bridges to nowhere, etc.
Has anybody else noticed this?