Stocks up, gold down - time for a change in thesis?

[ThePythonicCow]

Re: Stocks up, gold down - time for a change in thesis?

Please take the unemployment numbers from 74-75, and compare with the dow jones index from that era. Based on a comparison, we should be at least 1 month into a bull.

Perhaps this is not a replay of 74-75, or anything resembling it?

[metalman]

Re: Stocks up, gold down - time for a change in thesis?

I agree, I think the reflexivity term Soros use is perfect to describe it.

If the dollar weakens because the market believe in recovery and people move out of cash, and the yield curve steepens because bonds sell off, then that action will actually promote recovery, as the market perceptions shape the event's, that again will influence perceptions, that again will influence the events. This dynamic is lost by so many, that think the fundamentals is like some pre destined thing, disconnected from the perceptions of the different players in market.

Deflation? That's not what the market is saying.
http://finance.yahoo.com/echarts?s=T...urce=undefined

nero, you're getting the inflation part of the itulip argument but you're missing the big picture.







as this analyst explains, the system blew up in sept. 2008 and you can see it clear as day in the flow of funds analysis itulip did...

http://www.itulip.com/forums/showthr...3348#post83348

here's what happened...



now, some $$$ was scared out of the treasury bond life boats by all this fed printing...

No such thing as a Treasury bond bubble

...but that does not mean that the debt deflation bear market is over and a new bull market has started.

did you get out in dec. 2007 as itulip warned? if not, and i bet you didn't, then you are trying to 'make it back' in re-loader fashion...

Reloader: n. A sucker with a track record of naivety, ignorance, or just plain stupidity, hence a scam artist's preferred customer. A sucker who has proven his vulnerability is more likely to fall for a subsequent, properly constructed scam than the average person in the telephone directory. For example, a classic follow up fraud is to approach someone who has been defrauded and sell him services to "recover" previous losses. The smartest investors and traders learn from someone else's mistakes, which is good, because nobody lives long enough to make all the mistakes himself. Many people seem to learn only from their own mistakes. Some poor, lost souls don't even learn the hard way. They become "reloaders," two-time losers, or even serial victims.

if you did get out and now you're trying to make some pocket money by trading the bear market rallies, power to you.

if you honestly believe that the depression is over, there is no evidence to support this idea.

if you believe the depression will continue but that stocks rise during economic depressions, i don't know what to say.

[ThePythonicCow]

Re: Stocks up, gold down - time for a change in thesis?

here's what happened...

Nice video - the one from Argentina.

I'm still not convinced this will play out like it has in Argentina however.

As I'm fond of analogies, let me try this one When the elite Banksters hit on Argentina, it's like when the Mafia hits on my small shop, extorting money for "protection" until I can pay no more, then burning me down (as they run out the door.)

But when there is a major power struggle in the Mafia itself, that's a different game. Whether any unexpected corpses or arsons show up on my property will be rather accidental. The real show is going on behind the scenes, unreported in the wholly owned newspaper, not investigated by the wholly controlled police department and more facilitated than regulated by the wholly owned government. Best to just keep one's nose clean and head down, and hope for a bit of ordinary luck.

This blowup has been anticipated by the elite, as it was by iTulip. The elite are using this "opportunity" to globalize their control of Anglo-American banking and to bring America under more their more socialist, global control. They are using financial terror as Stalin, Hitler, Mao, Pol Pot and Saddam used physical torture and genocide, as means to control.

The above Argentina video clip states that the financial disease is like a cancer that has metastisized, which will kill the patient. It is not clear yet to me that it will kill the patient. The elite might succeed in mutating the patient, the world economy and subordinated political and industrial systems, into a more subservient form more of their choosing. During the process however, it may be difficult for us serfs to distinguish between financial terrorism and death throes in the world economy. I doubt that the remaining residents of Hiroshima and Nagasaki were thinking of the looming Cold War power struggles on the day that World War II ended, even though I am pretty sure that Truman, Stalin and Churchill were all well aware at that time of the critical role nuclear weapons, and the demonstrated willingness to use them, would take in the coming power struggle between Russia and America.

[doom&gloom]

Re: Stocks up, gold down - time for a change in thesis?

I'm gonna toss in the simplistic view. The market P/E is WAY overpiced and...

"sell in May & go Away..."

[metalman]

Re: Stocks up, gold down - time for a change in thesis?

I'm gonna toss in the simplistic view. The market P/E is WAY overpiced and...

"sell in May & go Away..."

for sure sell before the fiscal deficit shock news hits in may or sooner after the tax money is counted after april 15...

Flow of Funds in a Transformational Depression

[stockman]

Re: Stocks up, gold down - time for a change in thesis?

NERO3- "I agree, I think the reflexivity term Soros use is perfect to describe it."

Speaking of Soros- the trader. In addition to reflexivity Soros is well known to take positions and press them (increase size) when he has strong conviction in the trade. Then he may... dump the trade taking his profit and take the other side, sometimes with no clear evidence that his thesis was wrong. As I recall he discusses his success as a trader (in securities) standing in contrast to his failure in the predictions business. Pointing out that the markets action- perhaps as participants sense the wisdom of his beliefs... moves in his favor, confirming his thesis but often forcing regulators/decision makers to take actions averting the event he was expecting/predicting. My guess is that when Soros senses too many accepting his thesis he is alert to the possibility of reversal- especially if the regulators/decisionmakers have also recognized the same risks. So he simply changes sides. Profiting on the way down (up) and on the way up (down).

Some, Taleb comes to mind, suggest this as THE key factor in Soros success as a trader. Willingness to CHANGE his mind - a very rare trait among investors/traders. A common, sometimes fatal flaw for investors and traders is to become married to their position or thesis. Allowing losses to mount (or gains to be given back)... only accepting that they were wrong after crippling losses are realized.

My experience forces me to consider both sides - I do not favor being locked into any long term thesis or strategy. This is difficult for me at times but I have found having predetermined stop points on my positions is helpful. When I have no position (having been stopped out) I find I can be more objective in evaluating the situation- whether to stay on sidelines, buy back into my operating thesis or change sides.

Currently the market is trading well. Whether or not we are in a bear rally or a new bull market is less of interest to me than making money. So I'll stay with what's working. The issue of bull or bear rally will only be determined with hind sight I'd guess. There is plenty of evidence for both sides to reference here to bolster their case - but the fact that the sentiment is so lopsided makes the risk:return favor the bulls here IMHO.




On media and corruption... this note from Bill Cara's site I liked:

"When all is said and done in capital markets, the only people left standing are those who can make money. It takes a severe test of the kind we are having now, like others I have gone through since the 1960s, although this is the worst, to show all of us who have a heartbeat that: (i) Financial Entertainment TV is a fraud, (ii) Heads that talk can’t walk, (iii) politicians know lots about politics and very little about capital markets and financial services, but will listen to whomever is paying them the most, (iv) Humungous Bank & Broker has the unfair advantage, can lie and cheat and get to keep their jobs, while never having to say they’re sorry, (v) Ivory Tower economists who parade on TV are phonies who add little to no value other than perhaps entertainment, and (vi) corporate senior officers and directors play the game for power and greed, leaving as little as possible on the table for the workers, the suppliers and the investors of the stocks and bonds."

[doom&gloom]

Re: Stocks up, gold down - time for a change in thesis?

oh yeah, been selling already and more to go next week.

[Guest]

Re: Stocks up, gold down - time for a change in thesis?

Frenetic trader. Ho hum. The most widely propagated investor class on the planet.

oh yeah, been selling already and more to go next week.

[doom&gloom]

Re: Stocks up, gold down - time for a change in thesis?

not really. I bought a bunch of oil/coal/pipeline stuff on the way down,
rode it up afternovember, then down again, now up again, and hoping to
get out for the down and buy back later...

[vinoveri]

Re: Stocks up, gold down - time for a change in thesis?

Things have always been screwed up like this. It's the nature of human kind. And yet, we progress, we innovate, we move forward.

Move forward to what ....? And along the way we have Hitler's, Stalins, etc (and that was only a couple of generations ago).

A blind faith in "progess" and the "goodness of human nature" and the inevitability of man's improvement is what prevents REFORM - I think it comes from that social darwinism nonsense which is at best a circular reasoning argument - i.e., "evolution can only progess in a direction that improves the species".

Agreed that we tend to move forward technologically and this increases wealth and standard of living (at least since the end of the dark ages), but think man has made only some patchwork progress in justice - and has devolved in many areas of morals (or what you might call ethics).
I agree, it's in the nature of human kind, to lie, cheat, steal, and murder.

The founding fathers knew better then to place their faith in nobles, and they established a republic based on individual liberty grounded in Natural Law. Their distrust of kings and monarchies was a reflection of their distrust of man. They knew history.

[Guest]

Re: Stocks up, gold down - time for a change in thesis?

Sounds like a set of buys based on the parameter that you required a decent return within 12 months. Nothing wrong with that but it should be clearly dstinguished as a short term investment - otherwise known as a "trade". Again - "not that there's anything wrong with that" (to use a Jerry Seinfeld expression).

In the market upheavals we've had this past 18 months, trading positions occupy a special place - both the most conservative, and the least conservative way to try to gain a winning from the markets. I don't like this activity for what is admittedly a silly reason (I suppose) - it requires me to stay with attention glued onto the markets daily to detect my exit points, and even then the results can vary widely.

I get claustrophobic when I have a ring through my nose to either watch the markets daily or risk losing a pile of money. Here's the thing though - oil / gas / pipelines - this stuff all very likely has 300% upside at least over the next 5-7 years. That is one fat hidden dividend for merely holding them long enough to collect.

What's with all the trading, when you can collect a lazy 50% a year annualized over seven years just by holding?

Making a series of buys at the blasted out market lows this last November and then March of 2009 may strike some as highly speculative - but if those were oil / coal / gas plays bought with a 5 year time horizon and no sale in mind short term - they would be arguably the most conservative investments on these entire web pages for the 2010's.

30%-50% a year return when averaged out over the next decade, from the March lows seems overwhelmingly likely when looking out to 2019 from here.

Of course one then has the challenge of actually holding them that long ... It's the wild swings that tumble 95% of owners of these shares off the savagely bucking bull market in energy, which likely stll has a 20-30 year bull market ahead of it. Yes, even with oil recently bottoming in the mid $30's, it's an energy bull market - expressed over 30 years - and we are still right in the middle of it. Problem is, that could get seriously boring (or wearying) - holding energy sector positions for 30 years? Where's the fun in that?

not really. I bought a bunch of oil/coal/pipeline stuff on the way down, rode it up afternovember, then down again, now up again, and hoping to get out for the down and buy back later...

[nero3]

Re: Stocks up, gold down - time for a change in thesis?

Perhaps this is not a replay of 74-75, or anything resembling it?

Here:

http://research.stlouisfed.org/fred2/series/M1

(mirrors end of last recession)

http://research.stlouisfed.org/fred2/series/UNRATE

(UN rate trend mirrors 74-75), even the pattern is a pure repetition.

http://research.stlouisfed.org/fred2/series/USMINE

(natural resource employment) Mirrors era around 1976-1977. It's going to go up I think. It's nothing like 1929. 1999-2000 was more like that, in terms of commodities.

It's so much cash and money out there on the sidelines, and the inflationary pressures that will arrive is going to be huge.

In terms of the other variables, I think the 1907-1908 era comes to mind. So does the era somewhere between 1937 and 1950.

Emerging market mirrors the dow jones in around 1948-1949, and also in around 1988-1989. Those countries will boom, if the dollar weakens. That's all it takes.

[Guest]

Re: Stocks up, gold down - time for a change in thesis?

And you may not see much of anything going on in the USD currency index either as all the other currencies emulate worthlessness alongside the US dollar and they all drift down together in one happy family of fiat. Mainstream media financial analysts should then be looking at the "stable dollar" and the "soring indexes" and be tossing their hats into the air in jubilation at the resurgence of a strong economy.

Here:

http://research.stlouisfed.org/fred2/series/M1

(mirrors end of last recession)

http://research.stlouisfed.org/fred2/series/UNRATE

(UN rate trend mirrors 74-75), even the pattern is a pure repetition.

http://research.stlouisfed.org/fred2/series/USMINE

(natural resource employment) Mirrors era around 1976-1977. It's going to go up I think. It's nothing like 1929. 1999-2000 was more like that, in terms of commodities.

It's so much cash and money out there on the sidelines, and the inflationary pressures that will arrive is going to be huge.

In terms of the other variables, I think the 1907-1908 era comes to mind. So does the era somewhere between 1937 and 1950.

Emerging market mirrors the dow jones in around 1948-1949, and also in around 1988-1989. Those countries will boom, if the dollar weakens. That's all it takes.

[nero3]

Re: Stocks up, gold down - time for a change in thesis?

I think you are way to pessimistic, but anyway, if things goes the way the Argentina man predicts (that is not compatible with the notion that it's not a treasury bond bubble, of course it is a treasury bond bubble in the eyes of Salbuchi), anyway , what you should own is things like railroad stocks, and physical gold,, even real estate or anything else, just not paper cash or treasury bonds, and the reason for that is that it will be impossible to time the move out of paper.

However i think that long term interest rates will head up, and you get a boom where long term interest rates trend up, and eventually you get the recessions again, where the federal reserve will have to clamp on the brakes to control inflation.

[CanuckinTX]

Re: Stocks up, gold down - time for a change in thesis?

Nero, I have a question about your forecast.

Even if interest rates head up, if the US is faced with the prospect that the recession is going to set in again (or get worse, whatever), why do you think the gov't will care at that point about inflation? Wouldn't that just guarantee them a full-on depression if they clamp on the brakes? Maybe I'm missing something in your description because you don't mention the timeframes you see all of this happening.