More great stuff from UBS floor guy Art Cashin.
His take on the market? It behaves based on what people see when they look out their window, just like Dorothy from the Wizard of Oz:
The Dorothy Gale Market – Many years ago, in an on-air interview with Ron Insana, I coined the phrase “A Goldilocks Economy” (and its codicil the “Goldilocks Stock Market”).
Several years later, as the stock market struggled to rally out of the depths of the Dot.com debacle, I tried another children’s analogy. I called it the “Peter Pan” rally attempt because the bulls felt that “if you just believe. If you just truly believe” good things would happen. That never really caught on (maybe because it was Tinkerbelle who asked you to believe – at least I believe it was).
Nowadays, I’ve started to refer to the up-move as the Dorothy Gale rally. Dorothy and her little dog, Toto got swept up in an awful tornado only to land in a place that looked peaceful and quite wonderful (although it was imaginary).
These days, traders, much like Dorothy look out their windows (which are computer screens). Sometimes they are filled with rioting mobs, firing tanks and falling buildings. For Dorothy that would be like seeing a chicken coop, a park bench or a church steeple whiz by.
So, if you are Dorothy and you look out the window and there are no benches flying by, it might be a good day. Maybe it would be OK to go outside and play with Toto for a little.
Yesterday, there were no benches flying by. The world was not at peace – far from it. But the flying benches were on the other side of the mountain and, thus, not so readily visible.
Instead, past your window strolled Laszlo Birinyi who hinted the yellow brick road that we call the S&P might be a longer road than many thought. And Warren Buffett teased with Becky Quick that there might be some bargains out there too big even for him to pick up.
Also, passing by were folks like Bill Miller who said stocks were probably 20% undervalued. And then Leon Cooperman said “stocks were the best house in a good neighbourhood”.
So, with no flying benches and lots of cheery neighbours, Dorothy and Toto left the dark bedroom around 11:00 and went out to frolic in the meadow, midst the spring flowers for the rest of the day.
All that frolicking got them rather tired when they reached the property fence at 1301/1305. So, they just sat down by the side of the road and watched the sun go down as the bell rang. Tomorrow would be another day.
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