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To
OTC Journal Members:
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Root For The
Underdog |
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Americans tend to root for the underdog.
After more than two years of getting their brains beat out, stock market
investors can certainly be viewed as underdogs today.
Economic indicators have been improving
for five months, but the market continues south. Investors are getting
tired of seeing stocks get clobbered. The service sector had its highest
growth rate in two years based on today's report, but Wall Street is totally
focused on negatives- i.e. Dennis Koslowsky's indictment for sales tax
evasion and rising tensions between India and Pakistan.
So, out of pure desperation, the
OTC
Journal is formally announcing our undying support for the New Jersey
Nets in the NBA Finals, which begins this evening.
 
This year's matchup features the
heavily favored Los Angeles Lakers against the underdog New Jersey
Nets. Oddmakers have the Lakers favored by 7 1/2 points in tonight's
game. Many apologies to the Lakers Fans, but we are making this call on
behalf of stock market investors everywhere.
Let's face it; not many people outside
of the Garden State is giving the Nets a chance. This is similar to the
current sentiment where investors are about as sure of the Nets losing
as they are of the markets continuing to go south. Pessimism has
taking over as evidenced by the negative market reaction despite some bullish
macro economic data pointing towards a recovery.
This is all the more reason to sit
back and cheer for the New Jersey Nets. So what does the New
Jersey Nets and the stock market have in common?
We have done our homework and learned
that over the last eleven years the S&P 500 has performed
significantly better in years when the Eastern Conference Champion won
the NBA Championship.
The benchmark S&P 500
is widely regarded as the standard for measuring large-cap U.S. stock market
performance. This popular index includes a representative sample of leading
companies in leading industries. The S&P 500 is used by 97% of U.S.
money managers and pension plan sponsors. More than $1 trillion is indexed
to the S&P 500.
Championship teams from the Western
Conference such as the Los Angeles Lakers have won five out of
the last twelve championships. During those five years the S&P
500 index appreciated an average of 7.79%.
That is most certainly a respectable gain relative to the recent turmoil
the markets have experienced.
However, when
the team from the Eastern Conference reigned supreme the
average gain in the index has been 21.66%
which defeats its Western Conference counterparts by 13.87%.
Therefore, we are rooting for New
Jersey. At this point, we'll take anything that might help, as the
market needs something positive to hang its hat on.
Our attitude may seem irrational,
but it's no worse than dumping stocks in perfectly good growth companies
because Dennis Koslowsky got indicted and India and Pakistan are baring
their teeth like dogs on a leash.
Go New Jersey on behalf to
stock market investors everywhere.
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