Why the selloff today? Take your pick of answers - a slight increase in Treasury yields or Bear Stearns hedge fund problems - maybe both. Does it matter? I would like to say “no” because I get disappointed with investors who are constantly seeking simplistic answers to why the market moves the way it does.

However, it’s important to watch the questions more than the answers. Kinda like the game show Jeopardy! I find that whenever you hear investors desperate for the reasons why they lost money and when that desperation gets satisfied with bullshit answers provided by financial media, that means something. It doesn’t really matter what the answers are, but the questioning is key.

Usually a meaningful decline begins with a few days that go something like this: The market drops and the bulls who believe that they are entitled to gains every day ask why? In the first stage, they believe whatever reason is given. In today’s case, it was either rates moving higher by a smidgen or renewed subprime fears mixed with a little hedge fund meltdown paranoia thrown in. Regardless, I didn’t sense that investors are too worried by today’s selling and they seemed to buy into the answers that were given. If the market rebounds tomorrow on a reversal of either scenario - let’s say that rates head lower again or Bear Stearns finds a way to salvage the hedge funds - we are back to the races. On the other hand, if stocks head lower whether today’s worries are fixed tomorrow or not, then the questioning really heats up. When that happens, the answers become less and less important. So I’ll be listening for those questions and really don’t care what answers are given.