- “Ball don’t lie!” is the truth.
- All that lesson cost me was a shot of tequila.
- Price is the only thing that pays.
Today I want to talk about what Rasheed Wallace taught me about financial markets.
For those of you who are not familiar, Rasheed is a former professional basketball player, well known for his passionate, sometimes volatile personality.
His signature phrase – “Ball Don’t Lie” – has been heard across basketball courts all over the United States for decades.
Rasheed would shout, “Ball don’t lie!” after a missed free throw by an opponent following a questionable foul call against him.
From his viewpoint, almost like some kind of karmic vindication, if the player missed the free throw, it was evidence from the basketball gods that the foul call was bogus.
The ball delivered the truth.
Hence, “Ball Don’t Lie.”
Rasheed the Technical Analyst
The market might be full of noise, but price action does not lie.
To put it in Rasheed’s terms, “Price Don’t Lie.”
Rasheed didn’t need a referee to confirm what he already knew – that it was a bad call.
And we don’t need corporate earnings or news announcements to confirm what the market is already telling us.
Next time you see a stock up 200% or 300% in a few days, channel your inner Rasheed: “Price Don’t Lie.”
Macro Rasheed
This is especially true when you zoom out and look at the bigger picture.
You’ll often hear economists tell you a recession is coming and you should run for the hills.
But – just as often – price action tells us a different story.
We saw it this spring, when everybody lost their minds about tariffs and feared the end of the world as we know it.
Price action in stocks all over the world was suggesting the exact opposite.
The economists were wrong.
Price did not lie.
Back in early 2023, the consensus view among Wall Street strategists was the S&P 500 would actually fall for the year.
It was the first time this century Wall Street was telling its loyal followers in annual forecasts that stock prices were going down.
Well…
The S&P 500 rallied more than 20% in 2023 and then rallied more than 20% again in 2024.
In fact, the Nasdaq immediately doubled in price.
I’ll say it again: Price did not lie.
You see, prices for the majority of stocks were already rising throughout the back half of 2022.
The major indexes didn’t bottom until the fourth quarter. But underneath the surface, price was already telling us the truth.
Wall Street strategists lie to you, just like the economists lie to you, and all the news anchors reading their scripts on basic cable television lie to you.
“Price Don’t Lie,” like Rasheed teaches.
You Don’t Fit!
About 15 years ago I was down in Chapel Hill, North Carolina, with some friends for a football game.
There’s a popular bar there, the Top of the Hill, or “TOPO” for the locals.
As I was walking into the bar, Tyler Hansbrough was walking out. Tyler is a legendary Tarheel who led the University of North Carolina basketball team to an NCAA title.
It was cool seeing him.
Then the next thing I know, I’m trying to maneuver my way through a packed bar to get us some beverages.
Wouldn’t you know it… there’s former Tarheel Rasheed Wallace, yelling at me, “You don’t fit! You don’t fit!”
I still think there was plenty of room for me and my friends to get through there. I personally believe he was hogging too much space.
But, to this day, some of my friends still tease me about “that one time you almost got in a fight with Rasheed Wallace!”
That’s probably not something you want to do.
The truth is, I did fit. I was not being rude. He was just being Rasheed Wallace.
Rasheed claims his trash-talking comes from growing up playing basketball in the streets of Philadelphia.
He admits that he didn’t invent the infamous “Ball Don’t Lie” phrase, but he does get credit for bringing it to the NBA.
Turn Off the Noise
You could simply ignore Wall Street strategists, economist-talk, and financial media headlines. That is a good step.
Better still, you could be like me and use that information to your advantage.
It’s usually fake news, especially when they all agree. This goes for economists, strategists, and newspeople, be it old-school magazines or basic cable.
They are not to be trusted.
Only price does not lie.
And, for the record, I did not “almost get into a fight with Rasheed Wallace.”
I actually did get to the bar after Rasheed told me I didn’t fit.
And I bought him a shot of tequila. He thanked me and smiled.
It was all good.
Ignored the noise, went with my gut, made it to the bar, enjoyed a legendary exchange.
When it comes to the stock market, we want to do the same.
Ignore the noise, weigh all the evidence, make an informed decision, get a nice boost for our portfolios.
Price Don’t Lie.
Thanks, Rasheed.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs