A Kinder, Gentler Mr. Market?

The market, my various mentors have all told me, is designed to cause the most pain to the largest number of people. And while I am not in pain, the recent move up in the various market indices is certainly not in keeping with my thoughts that the economy is going to slow down and thus should exert downward pressure on the equity markets. Has the world transitioned to a kinder, gentler Mr. Market? One who views investors with compassion and encouragement? Has he truly turned over a new leaf, and this time promises to be different? Should I simply smile and be patient, or throw in the towel and buy the Vanguard 500? And is the stock market really all that good at predicting the direction of the economy?

This week we look at a few random ideas, throw out a few thoughts on China, comment on oil, and analyze today's inflation data. The good news for long-suffering readers is that this letter should be briefer than usual, or that is my intent as we start out. Let's see how it ends.

Rounding Out Inflation

Inflation, we are told, was just 0.2%, whether or not you took into account energy and food. That seems like a nice drop down from the well over 3% we have been seeing. But the number is a "strong" 0.2%. What the actual number came in at was 0.2423%. Rounding took it down to the "2" handle. Annualized, that is 2.9% inflation. Still higher than a central banker would…