I actually love this unyielding pessimism. It's a terrific real...

I actually love this unyielding pessimism. It's a terrific real life, real time case study of Phillip Fisher's theory of the 'financial community's appraisal cycle'.

Under this theory, Fisher states that the financial community's appraisal (i.e. sentiment) of a stock is constantly in a state of flux, and continuously cycles through four phases.

1) The financial community's appraisal of a stock is favourable, and the stock experiences abnormal returns.
2) A change in the financial community's appraisal of the stock occurs, from being favourable to unfavourable. This may be due to a justified change in the company's fundamentals, or an emotional / sentiment driven change which is unjustified and illogical.
3) The stock experiences a significant trend reversal and a prolonged period of sustained losses. Sentiment during this time is driven by doubt, uncertainty, pessimism and anger.
4) The financial community's appraisal of the stock once again changes from unfavourable to favourable. More often than not, this change must be driven by further improvement in the stocks underlying fundamentals (as a catalyst must drive a reversal in sentiment and emotion).

Often phases 3 and 4 are the most powerful. A stock will experience an large retrace. And, providing the market's reaction to what caused the retrace was unjustified and excessive , the stock will experience an even stronger positive re-rate higher.

Given the pessimism permeating these threads over the past 6 months; I'd suspect we are comfortably sitting in phase 3. I also remind everyone, however, that there has been no fundamental cause for phase 2 to occur, and as such, I would postulate that phase 4 - which I would suggest will occur in 2018 - will be extremely powerful.

The stock market is fascinating; even when we're losing money. Lessons, lessons, lessons.