Can we stop it with the sports analogies already? You know, the ones that say, "I think we are now in the seventh inning of this rally," or "It's the fourth quarter of this move, for certain." Oh, and by no means am I talking about just the bullish side of the equation. I don't like the "We're just in the first inning" talk, either. That informs nothing.
Why do I hate these analogies so much?
Because, in sports, you can't ever go back in time. In baseball, you can't be in the seventh inning and then go back to the fifth inning. In football, you can't be past the two-minute warning in the fourth and suddenly find yourself midway through the second quarter.
But in stocks? Yes, you sure can. Right at this moment, it does feel like we are in the seventh inning for some of these industrials. Boeing's (BA) stock was at $241 a year ago. Now it is at $353. Heck, we could be on the bottom half of the seventh, after seeing take me out to the ballgame!
Hold it, for a moment, though. What is the new low-level trade negotiations yield progress? What if the weird story in the Wall Street Journal yesterday about how the Chinese are, behind the scenes, starting to play nice, and are encouraging buying American, are true? What if the Chinese government takes an order from Airbus and gives it to Boeing? Then what inning are we in? The fourth? The second?
It's a worthless, misleading analogy.
Don't get me started about how sweeping the jeremiads can be, either.
Advanced Micro Devices' (AMD) stock is now up 200% this year. Almost the whole way, I have heard we are in the late innings for this one because of the perennial also-ran state of this semiconductor company. I have also heard that it's game over for the chip group because they all trade together -- as so many stocks bundled in an ETF tend to do.
Let's see, how do you get around the wrong judgment in this one? Do you say we are in the seventh inning and it is one of the longest seventh innings in history? Do you say that it's a brand new ballgame? Or it turns out that AMD just jogged onto the field and that's why it isn't the seventh inning for Lisa Su's transformed company? How about, you know what, I thought it was the seventh, turned out to be the first? For those of us who have believed in Su and her $32 stock since it traded at $11 I say, "thanks for nothing."
What inning is it for the housing stocks? The top of the ninth? How about the auto companies? Game over? Helpful?
Now one thing is certain: When you make a sports analogy, it sticks -- and it can, unfortunately, stick in a very positive way. Why is that unfortunate? Because it may always be worth it to a commentator or a hedge fund manager to say we are in the late innings of any move. What do they care? They aren't trying to make you money.
If the market goes down hard soon after you proclaim that it's the seventh inning, you are a genius. You are the man who called the shot. You are the new Bambino.
But if it keeps going higher? Well, it's just one darned long seventh inning.
Conversely, if you say it's in the early innings and we get hammered soon after, you are a YouTube joke for the ages, an endless continuous loop, signaling the twilight -- the ninth inning -- of your career.
The best thing to do? Lose the analogies. Give some circumstances that could lead to a continuation of a run or could create its demise. Don't put it in a timeframe. And let things play out. I know, then there's nothing to Youtube. No called-shot soundbites.
But nothing to make people fearful, either. Nothing to scare them out of their wits, either. Given that I bought my first stock with the Dow at 820, I guess you could say it's been a bullish long game, or even a bullish season.
Or maybe you should say there's no game at all, just lots of stocks that have done well over time for all. All but those who said it was the seventh inning the whole way up.