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Spitting the Dummy
Being collectors of colorful stock market aphorisms and sayings, we recently added “spitting the dummy” to the fold, after hearing it used by a friend who works at an investment firm down under. The expression, apparently common in Australia, describes a baby spitting out its pacifier (or dummy), a necessary prelude to outright bawling. But it can also be used to describe angry and rash behavior in general, as in how we heard it, “when the market spits the dummy, we’ll be ready to invest our cash”. After the petulant behavior of the stock market in the past week – with a record drop in the value of Facebook parent Meta Holdings (down 26% or a cool $250 billion overnight) and a day later a euphoric 14% pop in the value of Amazon (up a huge $190 billion) on the back of announcing higher Prime fees – the infantile analogy seems entirely apt. Surely, at a minimum, adherents to the school of efficient markets must be questioning market sanity in light of such massive moves among the world’s very largest and most thoroughly examined stocks. Just what is prompting this behavior, and what does it portend?