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That Mona Lisa Smile

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Are we data-dependent or data-addicted?

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How Does the Market Feel?

The Behavioral finance revolution demonstrates that markets are Psychological. But this is nothing new. After all, "Alan Greenspan said "the laws of psychology are immutable." Robert Rubin admitted, "Everything I have experienced suggests that, at the core, economic conditions and markets are grounded in the human psyche." But the Ben Bernanke school seems to suggest that markets may only be "Data Dependent?" So, how does the market feel? The market patriarchy has enthroned the eponymous but mysterious Mr. Market as the icon of risk appetite (read, Psychology.) But, the feminine factor has largely been denied. Ms. Market may be a better moniker for the emotional or limbic side of markets. It is time, in Financial Culture, to explore the Feminine. Sic, Ave Maria (Bartiromo), the best Gal Pal the market media ever had. But, the emota (daily sentiments) of the market, like that Mona Lisa smile are hard to read. And Ms. Market is often "hanging out" with her cousins Miss Perception, Miss Direction, and Miss Information.

Why do Blind Babies Smile?

It seems remarkable that even a congenitally blind baby has the same smile when pleased as any other seeing baby. Why or how does the baby who has never seen a human face, mirror the exact muscular response? We all smile the same way because our emotional brains are all identically hard-wired. This is exactly why every investor has to react, at least initially, in the same way to the same market action. You don't need no econometric textbook to understand the market. You can read Darwin's other book (the one not read) "The Expression of the Emotions in Man and Animals." Better yet, just stare at the face of Ms. Market and she may whisper some sweet somethings to you?

What does the Mona Lisa Smile Mean?

People attempt to measure sentiment in different many ways. Each to their own. Human beings like to know and the easiest measure of knowledge is simply…measurements. But the love of measurement can be classified as a disease called quantophrenia. Measure is not knowledge and knowledge may not be understanding. Are we data-dependent or data-addicted? The problem with sentiment, like any measure whether it be put/call ratios or earnings per share, is understanding what it means. We can see that the Mona Lisa is smiling but what does her smile mean? Well, it likely means different things at different times. Just like market sentiment means different things at different times. The way we are reading her mien is not as a smile but as a thinly disguised scowl. Yes, we think Mona is bearish! But she has bullish whims intraday?

The Sentimental Gurney

There are many emotions and several kinds of emotion patterning. Oh bulls, does the Mona Lisa moan for thee? Mona Mona Bobona Bananafanafofana, Mona. Or, is Mona Moaning for the Bears? Equity markets seem very emotional lately. But, they are in reality...always emotional. Perhaps Ms. Market will display more modest rather than racy behavior into this weekend. C'mon Mona. And as always, "May the Minyan be with you."
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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