Green Fisher: “Positive news hides well”

Last week I already discussed that the majority of investors are concentrating on possible negative scenarios and positive influencing factors are being played down …

Read between the lines

Last week I already discussed that the majority of investors are concentrating on possible negative scenarios and that positive influencing factors are being played down. This mood is typical of the early phase of a bull market and there are many fine examples of the “pessimism of disbelief” to be found in the current headlines.

Example 1: debt

For critical market observers, the rising national debt has long been a constant issue. To combat the corona crisis, the federal government recently cleared the way for taking on new debts, 218 billion euros in 2020 and 96 billion euros in 2021. Negative headlines are easy to find: “A weakening economy and an inexorably growing mountain of debt!” At second glance, it becomes clear that the Ministry of Finance has earmarked 9.6 billion euros for debt servicing in the 2020 budget, a significant decrease compared to around 12 billion euros in the previous year. Due to the ECB purchase programs and the global demand for “safe” bonds, the federal government now only expects a payment obligation of around 5 to 6 billion euros for 2021. The amount of debt servicing is decisive for debt sustainability!

Example 2: The second wave

COVID-19 continues to keep the world in suspense. The number of infections is increasing, and various regions have again taken restrictive measures. The horror picture of a repetition of the market distortions in the first quarter of 2020 is taking concrete shape. However, the headlines do not address the fact that investors’ expectations are now positioned quite differently. While the complete shutdown could cause a real shock effect for the markets, this time everyone is talking about a possible second wave – the negative potential for surprises is thus limited. In addition, the signals from politics are clear that they want to prevent the scenario of a complete economic lockdown by all means. These are by no means positive news in the true sense of the word, but that’s exactly what the stock markets are all about: A positive influencing factor can also develop from the fact that reality is not as terrible as assumed.

Example 3: inflation

Concern about rising inflation, with hyperinflation as a dangerous final stage, is basically justified. The undiscovered positive, however, is that this issue is not yet an immediate problem. Because the important question is what actually happens with the money that is available? It can currently be observed that the savings rates are increasing and the speed of circulation of money is very low. A certain inflation rate is basically okay – and mind you, the declared aim of the central banks – but the conditions are simply not yet in place to achieve a really dangerously high level of inflation. Sometimes it is also a positive influencing factor if it is simply too early to deal with a negative topic.


In the early bull market phase, negative news is on the plate, while positive news is hidden. This basically ensures good framework conditions and those who anticipate these hidden messages at an early stage do not have to deal with the tiresome saying “I would have just invested back then!”

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