Ignoring the Market's Teenage Angst

True confession: While I research investment ideas and watch the market, I often listen to music on my iPod -- no offense to the commentators on CNBC. And since I'm making confessions, I guess I should also disclose that a band claimed some of my misspent youth. If I'm lucky, the picture below is the only evidence of its existence.

As my iPod shuffles through a wide range of downloads, I tend to lock in on songs that best capture the mood of the market.

Last week the Tommy Dorsey and Frank Sinatra version of Blue Skies played through without notice. That song only works for prolonged rallies. And ACDC's Back in Black didn't seem appropriate as all the major U.S. stock indices slipped into the red, year-to-date.

(I'm third from the left with my band Rosetta Stone: A Legend Written in Rock. The 1980s were a scary era for fashion.)

Instead, I found myself listening intently to Matchbox Twenty's Push. The angst-filled lyrics, "I want to push you around, well I will, well I will. I wanna push you down" struck a chord. The market seemed angry, even petulant -- railing like a grounded teenager in reaction to the messages coming out of Beijing and Washington.

New Parental Rules
China's economy has been growing like gangbusters lately, partly fueled by the +32% growth in loans during the past year. Earlier this week, the Chinese government raised the reserve ratio for banks and also apparently told a number of banks to stop issuing new loans for the rest of January. The government is trying to ease the growing bubbles in both the housing and stock markets.

Closer to home, President Obama proposed new banking regulations that would seek to limit both the size and scope of banks. One proposal specifically would curtail the government protection of banks that traded securities for their own internal accounts or those that owned hedge funds or private-equity funds.

After all, many of the world's economies are growing again. Chinese exports grew by almost +18% in December -- a trend that the government wants to keep on track. Chinese businesses may have a harder time finding loans for real estate and market speculation. But I doubt credit will be a problem for the companies building goods to meet external demand.

The U.S. government doesn't want to bail out a bank that's blown it all by betting on speculative investments. And banks don't want the government interfering in their business. It seems like there's plenty of room to iron out a deal -- once the huffing and puffing stops.

What Now?
I called up Back in Black again. After all, not every stock market index in the world is down for the year. There are even some markets that aren't at odds with their respective governments. In fact there is one country whose market has a big man-crush on its new leader. Chile's stock market hit new highs following Sebastian Pinera's election a little more than a week ago.

Chile showed true prowess during the economic downturn, stimulating its economy with surplus copper royalties. Its economy is growing again. And its market is still in the plus column for the year.

There are a number of Chilean company stocks that trade on U.S. exchanges as ADRs, including banks, a well-known winery and even a mining company with lithium assets. And if you're tired of battling with our own belligerent teen market, it may be worth your while to invest in a well-behaving stock from Chile. That's one place I'm keeping my eye on.

And of course when I really start to drill down on an investment idea, the earbuds come out.