When Deflation = Inflation

[LargoWinch]

Re: When Deflation = Inflation

... when I think of what to call a missed 60% rise in the SP500)

Stan, a failed short call on the S&P after an irrational and unprecedented rebound regardless of fundamentals cannot be associated to a "missed" call on the rise in equities.

[GRG55]

Re: When Deflation = Inflation

I ... (Disservice ?!?! Disservice !?!! It is not the first word that comes to mind when I think of what to call a missed 60% rise in the SP500)

You should take comfort that there's always another opportunity. Always.

And if you sat on your hands and did nothing but hold your gold and Treasuries, you should have plenty of dry powder when the next one comes along...;)

[stanley2008]

Re: When Deflation = Inflation

You should take comfort that there's always another opportunity. Always.

And if you sat on your hands and did nothing but hold your gold and Treasuries, you should have plenty of dry powder when the next one comes along...;)

I agree with you, opportunity abounds. We live in an exceedingly complex world, I am not laying blame. My point is that EJ , while an exceptional analyst, is not all-knowing nor all-seeing.

[GRG55]

Re: When Deflation = Inflation

People harping about the iTulip equity market call last year seem to forget that EJ shut the site down after the tech bust because he did not believe the Fed and the government would sponsor a real estate bubble. As I recall iTulip didn't came back online until the spring of 2006 [?].

Seems to me there should be a whole lot of people around here wailing about the fact that they missed out on a lot of luscious leveraged profits because iTulip didn't make the call. After all, a government sponsored 60% pop in the stock market pales in comparison to that.

[GRG55]

Re: When Deflation = Inflation

I agree with you, opportunity abounds. We live in an exceedingly complex world, I am not laying blame. My point is that EJ , while an exceptional analyst, is not all-knowing nor all-seeing.

Absolutely agree. And that's why people around here ultimately need to think for themselves, non?

[cindykimlisa]

Re: When Deflation = Inflation

Stan, a failed short call on the S&P after an irrational and unprecedented rebound regardless of fundamentals cannot be associated to a "missed" call on the rise in equities.

dude youre in the smae boat as metalman

cindy

[Crazyfingers]

Re: When Deflation = Inflation

i'm metalman & i'm stupid.

when itulip said in 2001 'gold is cheap' & 'will go up for reasons a, b, & c" it did not say... 'hey, stupid. go buy gold'. that was for stupid to figure out.

when itulip said in 2009 'S&P will crash to 650 by year end' for reasons a, b,c, d, & e it did not say... 'hey, stupid. sell your stocks'. That was for stupid to figure out.

The problem is if stupid figured it out, they lost their ass.

[touchring]

Re: When Deflation = Inflation

pls delete, repeat.

[touchring]

Re: When Deflation = Inflation

Absolutely agree. And that's why people around here ultimately need to think for themselves, non?

I'm now comtemplating a 'follow Buffett' strategy, whatever he buys, buy, seems almost foolproof and works. Simple as it sounds, it's tough to implement. Buffet bought BYD at $7 or so, it shot up to $13, i hesitated, then the crisis came, i forgot about it. After the crisis, it shot up to over $70.

By the way, iTulip did call Green energy the next bubble, so in this respect it agrees with Buffett.

[jpatter666]

Re: When Deflation = Inflation

Absolutely agree. And that's why people around here ultimately need to think for themselves, non?

I agree, got my lumps, learned from it. But I'll add one BIG caveat -- we had several people on the site who were making the points that the market was going to go up more than anyone guessed -- and they were IMO pilloried for it.

I don't see many of those individuals anymore. Certainly not posting.

In this case, instead of encouraging more discussion and refining our thesis (checking it constantly to make sure we were not wrong), IMO we let our own prejudices about how the market was going to run overwhelm what the market was telling us. Those of us (and count me in this group) who stepped in front of the steamroller -- got crushed.

FRED once put up a posting asking what we'd do if EJ got a call wrong. I replied that we'd hopefully look back, find out what we did wrong, fix it and move forward. And I personally think one of those things is to be much more open to the opposing viewpoints -- because as we've recently learned -- they might just be right.

[flintlock]

Re: When Deflation = Inflation

This is the way I see it. EJ blew one call, for the S&P to drop to as low as 650 by late 2009. I didn't believe it, so I didn't act upon it. Some did, and are obviously a little sensitive now to Metalman's nonstop crowing about the Itulip Oracle's past calls. I find this understandable.

On the on the other hand, who the hell can predict anything these days with the degree of manipulation going on in the markets. If I remember correctly, EJ recommends about a 30/70 split of Gold/Treasuries? No stocks. So those who shorted ventured outside of EJs rather conservative investment thesis. I've done it before and got burned. So I sat this call out. Glad I did.

[GRG55]

Re: When Deflation = Inflation

I agree, got my lumps, learned from it. But I'll add one BIG caveat -- we had several people on the site who were making the points that the market was going to go up more than anyone guessed -- and they were IMO pilloried for it.

I don't see many of those individuals anymore. Certainly not posting.

In this case, instead of encouraging more discussion and refining our thesis (checking it constantly to make sure we were not wrong), IMO we let our own prejudices about how the market was going to run overwhelm what the market was telling us. Those of us (and count me in this group) who stepped in front of the steamroller -- got crushed.

FRED once put up a posting asking what we'd do if EJ got a call wrong. I replied that we'd hopefully look back, find out what we did wrong, fix it and move forward. And I personally think one of those things is to be much more open to the opposing viewpoints -- because as we've recently learned -- they might just be right.

I think part of what you describe is inherent in the nature of successful investing.

Personally I've found that I never make any money from positions that I have taken without serious conviction. I've made plenty of investing mistakes over my life, and there's more to come I'm sure. But I've learned that it's simply not worth my while to take a position without very strong conviction about it [and frankly I still don't have any conviction about this equity market rally].

What I saw early last year were several "camps" of people, ranging across the spectrum from outright bear to outright bull, that were vigorously debating their convictions. Nothing wrong with that, as long as the debate remains "civilized" and we all try to stick with the issues and not the personalities. To the degree that people were being "pilloried", it all to often was coming in the form of personal attacks unfortunately, and that's probably why some just dropped out.

[metalman]

Re: When Deflation = Inflation

I used to actively search for your posts Metalman, but lately it is as if you have become a commissar for EJ. I don't know where your objectivity and rationality has gone, itulip is the poorer for it.

Metal, has EJ made ANY bad calls on itulip? Has he written anything here that he was mistaken about? If you think so please put it in a post, maybe the exercise will help you regain some perspective.

ok, let me give you some perspective...

iTulip forecasts since 1998

iTulip has a record going back to 1998 for calling the most significant economic and financial market events since then–as noted by the financial press, above. In retrospect, these appear obvious but were heretical when they were made, as they went against the prevailing mood and beliefs of the times.

• November 1998: Warns on Internet Bubble
• August 1999: No Y2K Disaster
• November 1999: How the Internet Bubble Will End
• March 2000: Internet Bubble Top
• April 2000: A Bear Market is Born
• January 2001: Post-Bubble Recession
• September 2001: Gold Price Bottom at US$270
• August 2002: Warns of Housing Bubble
• January 2004: How Housing Bubble will End
• January 2005: Housing Bubble Correction
• June 2005: Housing Bubble Top, crash to follow that leads to severe recession
  
• October 2006: Severe recession starts Q4 2007
  
• December 27, 2007: Start of Debt Deflation Bear Market, 40% decline to follow
  
• June 16, 2008: Top of commercial real estate market, crash to follow
  
• September 15, 2008: Fed Funds spread signals crash
• March 27, 2009: Debt Deflation Bear Market: First Bounce

that is by not an exhaustive list...

To help you along here are 2 quotes from EJ , who is smart enough to know that everybody makes mistakes, and humble enough to admit it, unlike some other itulip members

"In retrospect, I should have stuck to the original DJIA Debt Deflation Bear Market re-inflation rally target of 10,000 made in Jan. 2008, rather than trying to second-guess myself later." (This refers to his call on the SP500 )

"Listening to Grantham, it occurred to me as it has from time to time since mid-year that I did my readers a disservice by not encouraging them to dive back into the stock market at the panic point in March 2009 as Grantham did." (Disservice ?!?! Disservice !?!! It is not the first word that comes to mind when I think of what to call a missed 60% rise in the SP500).

if you grantham's first 'bottom' calls... in oct 2008... you lost another 20% that you did not if you listened to ej.

granthum has issued a dozeon contradictory calls... 'Great bubbles like the one in 2000 take a long time to wash through the system, and you shouldn't really expect a low much before 2010. The fair value on the [Standard & Poor's 500 index] is about 1025 [versus 910 late last week].'
http://www.smartmoney.com/investing/...-holding-back/

later that month he says he's buying.

but that's noise... you forgot this... itulip isn't chasing the reflation rallies because we didn't lose 40% in 2008 in the first place... we dodged that bullet.

if you ignored the 'debt deflation bear market' warning in dec 2007 when the s&p was 1500 & stayed in the market thru 2008 & thru the predicted here before it happened 'reflation rally'... a fact you conveniently forget.. you still down 25% even after the 60% rise since mar 2009.

so... let me sum up your position. you want to not lose 40% in the predicted correction & also make a 60% gain on the rebound?

good luck finding that service.

[metalman]

Re: When Deflation = Inflation

when itulip said in 2009 'S&P will crash to 650 by year end' for reasons a, b,c, d, & e it did not say... 'hey, stupid. sell your stocks'. That was for stupid to figure out.

The problem is if stupid figured it out, they lost their ass.

no, you still don't get it. let me try again.

when itulip says 'time to short' that means 'time to short'

when the article says 'the stock market may go down' that means 'the stock market may go down'

when the article says 'reflation rally' that means 'reflation rally'.

stupid... that's me... doesn't trade the rallies, but if i did i'd get both the benefit of dodging the 40% down bullet in 2008 & the reflation rally starting in late mar 2009.

[dbarberic]

Re: When Deflation = Inflation

I love EJ's work, but quite frankly sometimes I miss the point of many pieces of his writing because it is so buried in supporting facts and historical references. Sometimes I find myself just saying "Get to the point EJ".