Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

[vinoveri]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

Lukester, now I'm confused. I thought you were Laszlo Birinyi.;)

[allenjs]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

But I think it's even longer a run than Birinyi, going out five years or more from here. I suggest this to you quite seriously - (at least some components of) EJ's Poom is going to arrive way early.

When talking about 88% runup in an index, it's important to distinguish whether you're talking about nominal or real terms. Otherwise the prediction is worthless, whether you get the nominal number "right" or not.

Everyone on iTulip has been predicting a large runup in the nominal value of the markets. The difference is that we accurately call it a "POOM" instead of a "bull market". Using terms like "bull market" incorrectly just plays at being contrarian.

I agree with you that it's sticking your neck out to predict it's done in 3 years. Many ugly and expensive things still need to happen in the next couple of years. Maybe 5-8 years is more like it.

[FRED]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

So, any reasoning behind this? Correct me if I'm wrong but EJ recommended selling as late as 2007, and this guy is predicting a bull market that would return the S&P to 2007 levels as early as 2012?

Additional point:

Birinyi’s October 2007 warning that a recovery in banks would be snuffed out presaged an 82 percent plunge in the S&P 500 Financials Index through March 6 of this year. Still, he was early in predicting the end of the bear market. He said on Dec. 8, 2008, that the S&P 500 bottomed the prior month, before the measure lost another 23 percent.

Versus:

November 25, 2008: Beware Relief Rallies Update 1: DJIA 7552 the bottom?

Birinyi does not understand the process of debt deflation.

[Basil]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

EJ's Poom is going to arrive way early.

Correct me if I am wrong, but it appears to me that Lukester is misinterpreting what EJ means by "Poom." I do not recall anywhere where EJ said that "Poom" refers to a rapid rise in the stock market. Rather "Ka" is meant to refer to a period of disinflation which some mistake for deflation, and "Poom" is meant to refer to a period of rapid inflation. During the "Poom" phase, markets will continue to fall rapidly as there will not be enough liquidity to sustain a fully functional economy. EJ has spoken of another bubble forming, but that is not "Poom" properly speaking and is predicted to occur after we go through KaPoom.

Metalman, any citations to help me out here?

[FRED]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

EJ predicts that inflation starts rising Q4 2009 and no later than Q1 2010 -- isn't this the beginning of the POOM (I am assuming that coming rise in inflation is part of the POOM, correct me if I am wrong) ? So, when you say "EJ's POOM is going to arrive way early", what do you have in mind ?

We also have suggestions for portfolio re-allocation coming up soon (which involves stocks) -- wouldn't this be a preparation for the upcoming market- rise. If inflation rises 100% over 5 years (if you believe in EJ's call) and so does the stock market (as predicted by Birinyi), the real returns will be negative and this is what is the general consensus here, no ? I agree that if this event unfolds, certain sectors and stocks will do much better than inflation. Do you have suggestions for specific stocks, sectors ?

So, basically -- isn't this call more or less in line with EJ's call of 100% inflation over 3-5 (?) years ?

EJ writes in:

At the risk of belaboring a point made 100 times here over 11 years, stock indexes do tend to rise nominally during periods of inflation but lag in real terms. The reason is that very few businesses benefit from inflation and most do terribly. Even mining companies suffer, as input cost increases, especially cost of money, outpace increases to revenue from re-ricing of product. This is why we stayed out of stocks, and especially mining stocks, and got into gold in 2001 to ride that period of re-inflation.

If you bet against our opinions and held stocks from the Sept. 2002 DOW low to late 2007 but were at least alert enough to listen to our Debt Deflation Bear Market warning Dec. 2007, you brilliantly captured a 181% nominal gain via perfect timing. But you missed a 255% rise in gold over the same period. It gets worse. If you stayed in stocks through the first year of the Debt Deflation Bear Market you are now up nominally 9% from Sept. 2002 whereas if you stayed in gold and did nothing at all you are now up 302%. Which is better, 9% or 302%? You decide.

Now we are in a new re-inflation period but much more dire than the last. Our friends who run companies do not like what they see. Their views mirror those expressed in the latest CFO SURVEY: HISTORIC RECESSION TO LAST ANOTHER 14 MONTHS; EARNINGS, CAPITAL SPENDING AND EMPLOYMENT EXPECTED TO DROP IN 2009.

We have never understood this fixation on stocks in the current environment. Stocks have always been a terrible way to play monetary and fiscal re-inflation. If stock indexes rise 88%, gold will rise 160% or more.

Genius is a rising stock market. If you are a trader it only appears that your choices were good during the bull market but stock selections don't matter during a bull market. In a bull market most stocks are going up, including some of the stocks you picked. In a bear market you have to be a true genius to make money picking stocks and timing sales, but truthfully only insiders and the very lucky make any real money on stocks in bear markets.

The current bear market started in Jan. 2008 just as we told you it would the month before. The bull market geniuses are having a tough time of it in this bear market, and it is not over. If you are looking for a recovery-killer, look no further than the housing market, and listen to the RRE and CRE experts among us are saying. We are looking for stock market opportunities hut it is not easy. The economy is in worse shape than most people think.

All information provided "as is" for informational purposes only, not intended for trading purposes or advice. Nothing appearing on this website should be considered a recommendation to buy or to sell any security or related financial instrument. iTulip, Inc. is not liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Full Disclaimer

[Guest]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

Fred, or EJ - allow me to respond. My reason for posting this was not because I am panting after the market as a "reloader". I'm really more interested in the point that for the past six months, the gist of what I've read in iTulip articles has never ventured anywhere near the notion that a North American index could see an extended resurgence for several years.

This period, out to 2012, it seems to me in a couple of landmark iTulip editorials, has been described as essentially moribund for the bourses.
Six months ago, I concluded otherwise, and mentioned it here. Lots of people laughed, but iTulip had no opinion on it other than to suggest extreme reticence vs. the idea of a renewed stock market rise.

So we are not discussing whether it's a brilliant play to pile into this market (although in some segments it may well be a very large play if it runs for years). The only point I wanted to make was that if one had mentioned to the editors here, and 98% of the community a year ago, that the S&P might embark on a 3 year, near 100% rise, this suggestion would have merely been met with smirks and catcalls.

I see other posters are now playing up the extent to which iTulip has been willing, or "approaching the idea of" recommending a few commodities - which involves being exposed to the equity bourses, because all shares are swayed in large market moves. Well, I hardly recall iTulip making any comments at all about getting any exposure to the equity bourses, in the past year.

So this isn't really about whether Birinyi does or does not understand debt deflation. It is about whether in a year to 18 months, the markets will be sharply net up or not, and if they are net up, it will become apparent that iTulip was nowhere near calling this past March as the nominal low. I've read at least two quite good advisors who called this past March as the low, right in the month of March.

One of my subscriptions advised me late in March, almost verbatim: "buy without fear, for a five year bull run starts from this point". That is how far this one analyst was willing to go out on a limb. I don't mean to be blunt, but iTulip has summarily dismissed many another analyst in the past few years and occasionally it comes across just a wee bit high handed. Birinyi may not be up to your top drawer standard, but he is not Mish, or Ackerman.

If we get a year or 18 months out from now, and the markets are significantly net up in the US, would it be too much to ask that you plainly and clearly acknowledge that you'd suggested, and many iTulipers were reflecting in their posts, the assumption that the markets would remain moribund "for years" back in the winter of 2008/2009?

I mean, didn't we just recently have a fracas about a potential new bull market in some sectors emerging, which was received as the most absurd suggestion on these pages ever? It seemed to me that nine tenths of this entire community landed on that notion as "absurd". This was described as "misleading" to the community, and "contrary to the iTulip thesis".

What is the position now? That we wish to acknowledge that "some activity in the bourses could occur", but it will only be reflective of dollar decay? Yes, the dollar decay, of course (although I'm remaining dollar bullish). My distinct impression has been that iTulip (advertently or not, is unclear to me) got a lot of people thinking in the winter of 2008 that the markets would be dead as a doornail for years after this recent market collapse.

An analogy was made to a "bouncing ball", after a big fall, which after the bounces in short order comes to a standstill?

This had nothing to do with the wisdom of being in the markets or not. It had to do with whether the possibility of their significant rise has ever even been discussed as a near term event in iTulip editorials this past year. Bottom line is that if the market displays a sharp net rise in the next 18 months, iTulip cannot claim that it anticipated it all along. I believe you were suggesting that event was likely out four or five years from now.

As to whether their rise now is an absurdity or not - we can only wait and see. One side or another will get painted into a corner on that eventuality.

Respectfully.

[FRED]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

If a post is prefaced with "EJ writes in" that means it was written by EJ and posted by FRED.

[aaron]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

88% rise in 3 years? What is the prediction for gold over the next 3 years?
To me, it seems the 88% rise in equities would be a gamble. You would be betting against fundamentals. Fundamentally, I think stocks are still twice the price of what they should be. Can we say the same for gold?

In my opinion, stocks are not a good bet. In fact, even if he could guarantee a 88% nominal return in the next 3 years, I am not sure that I would sell my gold.

I am going to stick my little neck out here and say we have reached the height of the market and are already starting down again. The dollar has turned, treasuries have turned, and even the precious metals have turned. Foreclosures are set to go up again. And, to top it all off, a CNBC guy went crazy on air.

[due_indigence]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

I confess to not having read the majority of this thread. But I don't see how nominal gains in stock indices are wholly unanticipated given the trillions of new dollars created. As for inflation-adjusted returns, that would be another issue entirely. I think Mark Faber has said as much too. Recent market gains are not leasding indicators of an improving economy so much as they reflect the largesse of the Fed in the face of a collapsing economy.

[c1ue]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

Lukester,

You also suggested the US dollar was going to rally.

Doesn't look like it.

Yen at 94 after touching 100.

Ruble just went under 31.5 (from trough of 36.5)

Brazilian real now a hair over 2 vs. trough of 2.6

Euro also swinging upwards despite horrific EU zone economic numbers: threatening 1.4 again

Scattergun approach?

[rjwjr]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

Fred, or EJ - allow me to respond. My reason for posting this was not because I am panting after the market as a "reloader". I'm really more interested in the point that for the past six months, the gist of what I've read in iTulip articles has never ventured anywhere near the notion that a North American index could see an extended resurgence for several years.

This period, out to 2012, it seems to me in a couple of landmark iTulip editorials, has been described as essentially moribund for the bourses.
Six months ago, I concluded otherwise, and mentioned it here. Lots of people laughed, but iTulip had no opinion on it other than to suggest extreme reticence vs. the idea of a renewed stock market rise.

So we are not discussing whether it's a brilliant play to pile into this market (although in some segments it may well be a very large play if it runs for years). The only point I wanted to make was that if one had mentioned to the editors here, and 98% of the community a year ago, that the S&P might embark on a 3 year, near 100% rise, this suggestion would have merely been met with smirks and catcalls.

I see other posters are now playing up the extent to which iTulip has been willing, or "approaching the idea of" recommending a few commodities - which involves being exposed to the equity bourses, because all shares are swayed in large market moves. Well, I hardly recall iTulip making any comments at all about getting any exposure to the equity bourses, in the past year.

So this isn't really about whether Birinyi does or does not understand debt deflation. It is about whether in a year to 18 months, the markets will be sharply net up or not, and if they are net up, it will become apparent that iTulip was nowhere near calling this past March as the nominal low. I've read at least two quite good advisors who called this past March as the low, right in the month of March.

One of my subscriptions advised me late in March, almost verbatim: "buy without fear, for a five year bull run starts from this point". That is how far this one analyst was willing to go out on a limb. I don't mean to be blunt, but iTulip has summarily dismissed many another analyst in the past few years and occasionally it comes across just a wee bit high handed. Birinyi may not be up to your top drawer standard, but he is not Mish, or Ackerman.

If we get a year or 18 months out from now, and the markets are significantly net up in the US, would it be too much to ask that you plainly and clearly acknowledge that you'd suggested, and many iTulipers were reflecting in their posts, the assumption that the markets would remain moribund "for years" back in the winter of 2008/2009?

I mean, didn't we just recently have a fracas about a potential new bull market in some sectors emerging, which was received as the most absurd suggestion on these pages ever? It seemed to me that nine tenths of this entire community landed on that notion as "absurd". This was described as "misleading" to the community, and "contrary to the iTulip thesis".

What is the position now? That we wish to acknowledge that "some activity in the bourses could occur", but it will only be reflective of dollar decay? Yes, the dollar decay, of course (although I'm remaining dollar bullish). My distinct impression has been that iTulip (advertently or not, is unclear to me) got a lot of people thinking in the winter of 2008 that the markets would be dead as a doornail for years after this recent market collapse.

An analogy was made to a "bouncing ball", after a big fall, which after the bounces in short order comes to a standstill?

This had nothing to do with the wisdom of being in the markets or not. It had to do with whether the possibility of their significant rise has ever even been discussed as a near term event in iTulip editorials this past year. Bottom line is that if the market displays a sharp net rise in the next 18 months, iTulip cannot claim that it anticipated it all along. I believe you were suggesting that event was likely out four or five years from now.

As to whether their rise now is an absurdity or not - we can only wait and see. One side or another will get painted into a corner on that eventuality.

Respectfully.

Lukester,

Sorry to be so blunt, but STFU. This was already asked and answered.

You can keep saying "but what if I'm right and EJ is wrong" all you want and it doesn't change anything. We are subscribers here because of EJ, not because of you so when I see EJ start a post with "At the risk of belaboring a point made 100 times here over 11 years", I get very nervous and worried. Many on this site are frustrated with you and you have made it very clear that you don't care. Fair enough, I can respect that. But, when EJ starts to show some frustration, that bothers me. If you ruin this INVALUABLE source of information for the rest of us, I will personally come to San Diego with one big boot looking for one big ass.

I'm not threatening, I'm speaking rhetorically to make a very important point...please back-off and please recognize that this is not the best site to belabor your views.

[Guest]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

Interesting comment.

[charliebrown]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

I'm with the itulip heard on this, but I have open eyes. If I see a momentum play, I'm going in, but mind you I am going to trade on a very short leash.

My not too learned thinking is that the fed can print up all the money it wants, but it has a hard time channeling where that money is going to end up. So I assume that it might end up in the stock market. That being said, J6P is broke and a debt slave. So consumer based stocks are not going to rebound. Also Uncle Sam's tax receipts are going to crater, so though you may argue that the Gvt will make up for j6p lack of spending, its credit card may get cut up too.

As an exmample On Apr 15, I put 2% of my money into SPY at 85, and put a stop in at 82. Since then I have moved my stop up to 86. As long as we don't gap down, Im going to make money, So if as you say we are in a long bull, then I will follow it up. Also take note that this is not putting the time honored 60% of my money in stocks, and also to EJs point, had I bought GLD (using GLD as a proxy) at the same day I would have bought at 87, thus have a 6% increase now as opposed to my 5% gain in stocks. I am nervous about my stock position, not so nervous about my gold position, I dont have it stopped out.

[Guest]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

Everyone on iTulip has been predicting a large runup in the nominal value of the markets. The difference is that we accurately call it a "POOM" instead of a "bull market".

Really? Where are all these posts I've missed the past year "predicting a large runup in the nominal value of the markets"? And were they explicitly referring to the next year or two, or were they kicking this can down the road "a few years" from now? BTW you'll be pleased to know that I did manage to read my ABC basics on Poom vs. Bull Market - back in 2007.

[labasta]

Re: Laszlo Birinyi calls it - new bull market running 3+ years - Jeez, I suggested it 6 months ago!

We are seeing stocks doing relatively well, we've already seen bonds do really well, currencies are still in check; but the real economy gets suckier and suckier at an ever faster rate. Mmmmm.

How much longer can the real economy go south, while finance tries to push north?

Either the bonds which tie the real economy to the financial economy break, or finance comes tumbling down to the size of the real economy.

Which is it?

I think the former is worse than the latter as the official medium of exchange will be worthless and the black market (real economy) takes over. If this happens, I bet we go to ww3, so the fascists who run the country can still keep it.

If the latter happens, the quicker we can rebuild.

I fear we are on the road to a finance/real economy dislocation, and so ww3 is inevitable.

Man I've gone and doomed myself there again.