Truth or Narrative? What matters most in markets?

In market turns (down or up) I remind others... and have to keep reminding myself:

"We are not investing to be right, we are investing to make money."

Seems obvious, but just watch everyone battle it out on whether the latest government move to provide loan facilities to banks was QE or not. Technically no. But narrative? The market voted yes.

When you get drawn into the argument, remember why we are here.

In 1996, I watched narrative drive truth.
We were in the depths of a semiconductor downturn. No one was buying equipment. Everyone has to keep current factories going so while no one was ordering NEW equipment, everyone was ordering parts. Intel made a big parts order in June. That showed up in the book to bill number which bumped up a hair off the bottom.
At the big semiconductor equipment conference of the year, SemiCon West, rumors, well whispers, were flying that Intel had placed an order.
They hadn't.
But no one knew at the time that the order was only for maintenance parts. Others like Micron and Samsung worried that if an upturn happened they would be caught too far back in the line to get equipment. So they placed orders to get an early spot in line. Others followed suit.
If this sounds nuts, it's human nature. FOMO.

Back to today.

That wasn't QE. But it WAS the government saying we won't let this whole thing burn down. A mini-put.

Better than how it looked Friday afternoon when SVB said they didn't know when or if any uninsured depositors would see their money.

We still may be in the later phase of a bear market rally that started in January. That is my inclination, because the market didn't see true capitulation. But these bear market rallies can move 20 - 50%, which is a big range.

The narrative of "new QE" supports the continuation of this bear market rally for a bit longer.

So does the broadening of investing in risky assets, with mega cap tech underperforming broad tech as investors sell the big guys to reallocate into a broader list of names.

No matter if:

The market didn't get cheap enough
Banking is a mess
This isn't QE

Embrace what is. Only suffering (and market losses) come from focusing on what should be.

Don't get stuck in a rut of bearishness.

Protect yourself from getting drawn in at the end of each bear market rally, only to lose money each time.

While I believe we are in a bear market rally, and not a new bull, I have learned not to get so stubborn as to lose money being right vs aligning with what is.

For now, I am watching more carefully...

Morgan Stanley shared this chart, I think to calm investors:

While it is rare to have 2 down CLOSES to the year, we probably have not seen the full downside volatility in stocks during this trading year.

Estimate reductions were focused on the next quarter:

This is normal market participant behavior. It means companies won't have big jumps down in estimates which could hurt their stock price. Then analysts fine tune estimates as we get closer to the time period.