Why the bears are wrong

[Raz]

Re: Why the bears are wrong

It was not cheap at the end of the 1960s , and if you look at price/book, yields on gov bonds, it could be headed for something similar to then, meaning waiting could provide fruitless, as someone then would have had to wait for 10 years, while still missing a ton of opportunities. Inflation seems to be the wave of the future, but then who really knows.

On pessimism and the article: I think a lot of the writings, especially from bears these days are just a function of their negative personality (this kind of person will often be prone to pessimism, and even be negative at all times, listen to an interview with the guru Mish, sounds like he needs a Prozac) , and I feel that's what the author are hinting towards in a rather cynical and neutral way. Why should anyone listen to someone that don't have the fiber to make it in them.

One thing I notice in the worst bears, is that it seems to affect all aspect of their lives, leading to a general misery, and a lack of seeing opportunities, it is even stressing to talk to such a person. I even associate this bearishness with traditional values, religion, one of the worst I know of that is a public figure must be Alex Jones. He have a distortion in his mind, that makes him unable to think a straight line.

Just like you could size it up in an intuitive fashion and understand, that a certain dot-com guy would loose it all again, as he would never get down from his la-la land, just as well understand that Alex Jones is paraniod after listening to him for 2 seconds, it's just as easy to predict some bear will never understanding when there finally is a bull-market and finally get the balls to plunge in, and if he does, then the bull-market will be close to the end, or the correction be right around the corner. The writer seems to fit into the hardcore cynical category not bull or bear as he is doing that kind of thinking when he is comparing these polar opposites, yet similarities between the dotcom and now.

Perhaps you should ignore my posts, nero. I'm just an ignorant religionist from the primitive culture of the southern United States, which itself is a primitive country lacking the superior culture of Northern Europe.:rolleyes:


Now here's a Canadian who just happened to be absolutely correct for at least the past three years.
Give him a try.

http://commoditybullmarket.blogspot....ate-for-s.html

PS. Could someone please embed this video? I tried, but I'm so challebged by high technology that my three attempts were unsuccessful.

[LargoWinch]

Re: Why the bears are wrong

http://commoditybullmarket.blogspot....ate-for-s.html

PS. Could someone please embed this video? I tried, but I'm so challebged by high technology that my three attempts were unsuccessful.

As per request Mr. Raz! (great find btw, thanks):

[Slimprofits]

Re: Why the bears are wrong

David Rosenberg is one of the people that I read on a regular basis in addition to EJ. Take note that he is one of the last remaining prominent 'deflationistas'.

One can still sign up for free trial access to Rosenberg's usually multiple daily updates here:

https://ems.gluskinsheff.net/index.ncl.html

[nero3]

Re: Why the bears are wrong

Perhaps you should ignore my posts, nero. I'm just an ignorant religionist from the primitive culture of the southern United States, which itself is a primitive country lacking the superior culture of Northern Europe.:rolleyes:


Now here's a Canadian who just happened to be absolutely correct for at least the past three years.
Give him a try.

http://commoditybullmarket.blogspot....ate-for-s.html

PS. Could someone please embed this video? I tried, but I'm so challebged by high technology that my three attempts were unsuccessful.

I have not tracked him that closely, but I have noticed he seems to have a pretty sober attitude. He is right in questioning the thing about productivity gains. Where is that supposed to come from? I think all the effects on that have been already taken out. A living standard increase for Americans is like a fantasy. A decrease in living standards and stronger export sector is more the reality, of course.Like his call on gov bonds last year, calling it a bubble, was of course good. His 18 year cycles (borrowed from warren buffet's 1998 speech), is also something I subscribe to, I think it's 16-18 years, and it is also possible to debate if it is in 98, the change started in most large cap companies topping out, giving a range from 2014-2018 when this secular bear cycle is over. However. I think that even if he seems it is rational that even using his kind thinking that the S&P should go to 650, that he then assume that there won't be any new driver, or new bubble that is able to prevent that, while I think it is possible that these forces already is present. I think there are inflationary forces present, there is cheap money getting cheaper, just look at agricultural commodities such as sugar (above 2008 highs), look at how high gold is, look at how inflation and interest rates are going down in emerging market's...In a secular bear cycle, a 18 year cycle, I even think that between an era like 1965-1982, there can be just as bad as a credit bubble as during the 1982-2000, it is just that the money is not bubbling in the US stock market. And it's not smart like I think he is possible saying that you should trade in and out of the secular bear market stocks trending flat (why even be invested in a secular bear market at all), instead it is finding something that is in a secular bull, possibly like gold, railroad, fertilizer, alternative energy, emerging markets pick your poison.

[nero3]

Re: Why the bears are wrong

http://4.bp.blogspot.com/_pMscxxELHE...laimsJuly7.jpg

I like this image, and I compare it a bit to 1975 now. The low was in dec 74, and in comparison to that, if we think repeat, the low in the stock market resembling dec 74, was march 09. that fit with the unemployment data. I think that kind of model fit better than the comparison rosenberg does with the 2001 bounce. The housing bubble peaked in 05. there was then 3-4 years of devaulation (totally unlike the 2000-2003 period). It's not like it peaked in 2007-2008, as a lot of the action in 05-08 was just part of the devaluation or the pillow the housing market landed on, in my opinion.

Notice that in the 74-75 period, the continued claims lagged the stock market low, 3 months or so, while the initial claims peaked around the market low. I think it is pretty much the same as now. Back in the seventies, I think the homebuilders peaked early in 72, then had their low then in late 74. The dotcom bust was much more deflationary in nature, in comparison to the housing bust that started in 2005.

[cjppjc]

Re: Why the bears are wrong

Anyone who says differently is almost certainly using "operating earnings", and it's not cheap even when using that nonsense invented by Wall Street in the mid-1990s to justify overvaluation.

I always like EBITDA. Earnings before interest, taxes, depreciation, and amortization. Like they don't count. :cool:

Wish I could live like that.

[cindykimlisa]

Re: Why the bears are wrong

"So what next? According to another great investor, Sir John Templeton, bull markets are born in despair, grow amid skepticism, mature in optimism, and die amid euphoria. Nobody can blame the über-bears for enjoying their moment in the sun; they've earned it fair and square. And if in doing so they set the stage for the birth of the next bull market, we'll have som ething else to thank them for."

The above quote is the exclamation point to the article in question from Nero and Newsweek.

"bull markets are born in despair" - ala March 2009

"grow amid skepticism, mature in optimism" - May 2009

"and die amid euphoria." June 2009

And here we are in July 2009 Going down all month

I dont have to be an "Ultra Bear" to figure that out.

So Sir John and Nero I ask - Based on your theory have we really "set the stage" now for a Bull or a bear market?"

Just a few things to ponder before you answer: Unemployment, Retail closings, PE ratios, Real Estate Vacancies _ Need I go on?

[nero3]

Re: Why the bears are wrong

"So what next? According to another great investor, Sir John Templeton, bull markets are born in despair, grow amid skepticism, mature in optimism, and die amid euphoria. Nobody can blame the über-bears for enjoying their moment in the sun; they've earned it fair and square. And if in doing so they set the stage for the birth of the next bull market, we'll have som ething else to thank them for."


Just a few things to ponder before you answer: Unemployment, Retail closings, PE ratios, Real Estate Vacancies _ Need I go on?

You are mentioning the bad things here in the end. When are you going to buy? When things look good, and are peaking out as in 2000?

[BiscayneSunrise]

Re: Why the bears are wrong

Nice. Anyway. I feel the market's are primed for going up, in the coming week. I have been investigating the facts lately. That's my conclusion. You can't argue with testosterone. This baby is lifting. The market is going to go up.

Markets crashing in Asia this morning.

[nero3]

Re: Why the bears are wrong

Markets crashing in Asia this morning.

Crashing? The Nikkei Down 2.55 %, but the shanghai index down only 1.07 %, the sensex down 1,12 %, I think this relative emerging market strength is actually a bullish sign for the week ahead.

[BiscayneSunrise]

Re: Why the bears are wrong

You say buy, I say sell. That's what makes a market.

[rjwjr]

Re: Why the bears are wrong

"Today's über-bears are making the same mistake in reverse. They may be right about the challenges the world economy is facing—shaky banks, weak consumption, deleveraging, the flu pandemic, etc.—but they are paying insufficient attention to the prices that companies are trading at in the stock market. That is why they missed the sharp recovery of the past few months and are now desperate to label it a bear-market rally."

I'm paying very close attention to the P/E Ratio of the S&P 500, and it ain't cheap. Anyone who says differently is almost certainly using "operating earnings", and it's not cheap even when using that nonsense invented by Wall Street in the mid-1990s to justify overvaluation.

We'll see whose missing it. I think both bulls and bears may be dissapointed in this new government operated market.

I wonder how the writer made out in 2008. If he was heavily invested then perhaps he's exibiting the "desperate bullishness of the fully invested". If so, he's very short on details and methodology for his present optimism.

Nero...I'd have to agree with Raz and the other 99% of opinions so far. You are anxious to be an early adopter, and not miss any of the gains once the market turns around. That is admirable, but it seems to have made you as much a blind optimist as are the clinically depressed pessimists which you say are the bears. I believe most iTulipers are neither. I see a community of open minded pragmatists, each attempting to make the best decision possible based on a number of sources, opinions, data, and history. At this point, this sober community of truth seekers can't yet share the bullish optimism you so wholeheartedly espouse.

Also, in my humble opinion, your wealth of comparisons to early markets and time periods are somewhat misguided. The most logical comparisons should be of those previous market eras in which we had a credit bubble burst. My understanding is the most recent was the 1929 crash. Before that, from memory of previous readings, was 1875 I believe. Also from memory, I think there have been 5-6 such credit-bubble episodes, but most start getting somewhat far back in history. Anyway, for you to keep comparing this current episode to simple recessionary corrctions of the recent past is somewhat apples & oranges to me.

[nero3]

Re: Why the bears are wrong

I don't think 1929 is relevant, because there was not a run-up like this in 1929. In 1929, the stock market was much more expensive, stocks had been rising like the nasdaq between 1995-2000, the consumer mood was totally different to the 2005-2007 period, it was much more like the mood in 2000. Since then, stocks have been deflated through a wave of inflation. In real terms measured in hard assets such as gold stocks are not in a bubble.

The real estate bubble got going somewhere around 1995, and did not end like the stock bubble in 2000, the real estate bubble and general inflation kept the stock market floating along, while loosing value in real terms.

I think those who compares this to 1929 or japan are missing the currency element, in the sense that the dollar have lost 2/3 of it's value since 2000, just see the dollar against the swiss franc. Going ahead I think the US stock market could very likely kind of hug along like the Japanese market did from 2003-2008 as these markets are moving in tandem. If yields on gov bonds start hitting the 5.5-6% range then the US economy is likely to experience stagflation and a flat stock market. If the US don't experience strong loan growth, in the same way as japan, then I think the gov spending will work, just as in japan, to make the market go flat, as the Japanese from 2003. I am mentioning this because the US market now is priced around identical to the japanese, and Not, like japan in 1992.

[goadam1]

Re: Why the bears are wrong

http://www.newsweek.com/id/206227

Good article

Bears: Exit Stage Left

Time for rock-star pessimists to wise up.


Comparing todays bears with the dot-com bulls. In my opinion, spot on.

I'm still happy I "missed out" on 2003. Sticking with my 15% stock allocation. We'll see.

[nero3]

Re: Why the bears are wrong

I'm still happy I "missed out" on 2003. Sticking with my 15% stock allocation. We'll see.

The dow as an average is not that hot, it's actually 20 % lower now than in nov last year in real terms (measured against my local currency), even it's around the same 8100 level. But certain sectors, is good, emerging market's and certain stocks can do very well I think.