You will know that the herd is moving south when bad news is no longer accepted as good.

Bezos over at Sacmazon has been bleeding cash for quarters now.  All of this was glossed over as the shares were pumped to the sky.  Shareholders were led to believe that getting paid for crappy performance was, of course, normal.  Expected even.  Just like back in dot bomb.

And so today they are shocked at having heard the company report a profit only to see the shares lose 8% at the open.  Forbes explains that it is all about forward guidance, but the guidance was really not much different than the past quarters.


In truth, the herd is read to move south and so, as predicted many times in these pages, seemingly good news will be ignored or at best under rewarded while bad news is treated as a diagnosis of untreatable cancer.  To the degree that these bloated markets have overshot to the top, that is the degree they will under perform to the down side.