THE LITTLE STOCK MARKET THAT COULD

remember that story about the train loaded with all the toys for christmas that couldn't make it up the mountain. then it got this great positive attitude and kept saying to itself, "i think i can, i think i can, i think i can". with that it slowly made its way to the top of the mountain and was able to get over the top and make its way down to the town to deliver the its payload to the town. the moral of the story is that if you think you can, you can. aren't fairytales great!

for the past few months, the stock market has had a wonderful attitude and in turn has had a wonderful rally. we are all convinced that the economy either is or will recover and that in turn, the stock market will (or has) recover as well. attitude is everything!

as long as we all keep believing that the market will rise, it may do just that. lots of what happens in the stock market is about perception and attitude. right now, we have a great attitude and consequently we have a great market. yet, unlike personal motivation that can lift our spirits and help us to achieve personal goals, stocks need fundamental business strength and profits to justify valuations. attitude can help us to achieve our goals but it can't fix structural problems in the economy or in business operations.

businesses can't operate from an attitude of "i think i can" for very much time if revenues and profits don't grow. the stock market can't maintain its gains or rise further, if the valuations are based on "positive attitude" influenced valuations. business and economic fundamentals must follow, and soon, or else the positive attitude will fade and gains will as well.

have a grateful day!

larry