From yesterdays update:
"Reinhart and Rogoff observe that following systemic banking crises, the duration of housing price declines has averaged roughly six years, while the downturn in equity prices has averaged about 3.4 years. On average, unemployment rises for almost 5 years. If we mark the beginning of this crisis in early 2008 with the collapse of Bear Stearns, it seems rather hopeful to view the March 2009 market low as a durable "V" bottom for the stock market, and to expect a sustained economic expansion to happily pick up where last year's massive dose of "stimulus" spending now trails off. The average adjustment periods following major credit strains would place a stock market low closer to mid-2011, a peak in unemployment near the end of 2012 and a trough in housing perhaps by 2014. Given currently elevated equity valuations, widening credit spreads, deteriorating market internals, and the rapidly increasing risk of fresh economic weakness, there is little in the current data to rule out these extended time frames.
In recent months, I have finessed this issue by encouraging investors to carefully examine their risk exposures. I'm not sure that finesse is helpful any longer. The probabilities are becoming too high to use gentle wording. Though I usually confine my views to statements about probability and "average" behavior, this becomes fruitless when every outcome associated with the data is negative, with no counterexamples. Put bluntly, I believe that the economy is again turning lower, and that there is a reasonable likelihood that the U.S. stock market will ultimately violate its March 2009 lows before the current adjustment cycle is complete. At present, the best argument against this outcome is that it is unthinkable. Unfortunately, once policy makers have squandered public confidence, the market does not care whether the outcomes it produces are unthinkable. Unthinkability is not evidence.
Moreover, from a valuation standpoint, a further market trough would not even be "out of sample" in post-war data. Based on our standard valuation methods, the S&P 500 Index would have to drop to about 500 to match historical post-war points of secular undervaluation, such as June 1950, September 1974, and July 1982. We do not have to contemplate outcomes such as April 1932 (when the S&P 500 dropped to just 2.8 times its pre-Depression earnings peak) to allow for the possibility of further market difficulty in the coming years. Even strictly post-war data is sufficient to establish that the lows we observed in March 2009 did not represent anything close to generational undervaluation. We face real, structural economic problems that will not go away easily, and it is important to avoid the delusion that the average valuations typical of the recent bubble period represent sustainable norms".
A long article, but very well written and a must read IMO.
http://www.hussmanfunds.com/wmc/wmc100628.htm
Last edited by liv2ski; 06-29-2010 at 10:37 AM.
Never in U.S. history has the public chosen leadership this malevolent. The moral clarity of their decision is crystalline, particularly knowing how Trump will regard his slim margin as a “mandate” to do his worst. We’ve learned something about America that we didn’t know, or perhaps didn’t believe, and it’ll forever color our individual judgments of who and what we are.
it is but it's going to bounce back 30 seconds later![]()
No Roger, No Rerun, No Rent
9600 Dow, then we bounce higher into September. Magic 8 ball never lets me down.
Cold Shoulder: Goldman Warns If 1,040 Is Taken Out In S&P, 865 Is Next Stop.
You may want to check that 8 ball.
http://www.zerohedge.com/article/col...-865-next-stop
Never in U.S. history has the public chosen leadership this malevolent. The moral clarity of their decision is crystalline, particularly knowing how Trump will regard his slim margin as a “mandate” to do his worst. We’ve learned something about America that we didn’t know, or perhaps didn’t believe, and it’ll forever color our individual judgments of who and what we are.
Do the opposite of what GS publicly announces, its worked really well for them.![]()
Never in U.S. history has the public chosen leadership this malevolent. The moral clarity of their decision is crystalline, particularly knowing how Trump will regard his slim margin as a “mandate” to do his worst. We’ve learned something about America that we didn’t know, or perhaps didn’t believe, and it’ll forever color our individual judgments of who and what we are.
good thing those circuit breakers for individual stocks were there![]()
No Roger, No Rerun, No Rent
What is the current speculation for todays citibank 6%+ tank? Is it that they broke 4.00 price yesterday closing at 3.99 that made investors panic where the next support would be?
Just curious, interesting to see the individual circuit breaker kick in. (and do nothing to stop sell off)
jesus fucking h christ almight motherfucker
9774 dow....another ~170 to go. Should be thru it with Friday's shitty jobs #.
I think those shitty job #s are baked in.
Nahh, it's like constipation, Mr. Market's gotta push a little harder to drop his turd, he got some movement at the end of today..looking for a full release into Friday. No stool softeners for Mr. market, he enjoys grunting one out the hard way.![]()
Never in U.S. history has the public chosen leadership this malevolent. The moral clarity of their decision is crystalline, particularly knowing how Trump will regard his slim margin as a “mandate” to do his worst. We’ve learned something about America that we didn’t know, or perhaps didn’t believe, and it’ll forever color our individual judgments of who and what we are.
http://www.marketwatch.com/story/top...ce=patrick.net
ANNANDALE, Va. (MarketWatch) -- Slow and steady wins the race.
And I mean really slow -- and really steady.
That is the inescapable conclusion that emerges from the Hulbert Financial Digest's three decades of tracking investment advisers' performance. Believe it or not, the adviser at the top of the rankings over those 30 years has been largely in cash for more than a decade.
The adviser in question is Charles Allmon, whose advisory service is called Growth Stock Outlook. As of the close of trading on Wednesday of this week, the Hulbert Financial Digest will have tracked his performance -- along with the industry in general -- for exactly 30 years.
To be sure, we won't know for certain Allmon's final place in those rankings until then. But with just two days remaining of the more than 10,000 since mid 1980, he is in first place for risk-adjusted performance among advisers for whom Hulbert Financial Digest data extend back that far. So the odds in his favor look good.
Which is nothing short of remarkable, since for more than 20 years Allmon has allocated the bulk of his model portfolio to cash. It currently owns just four stocks that collectively amount to 20% of total portfolio value, for example; the other 80% is parked in a money-market fund.
One powerful investment lesson to draw from Allmon's experience has to do with the virtues of discipline and patience. Many counted Allmon out during the 1990s, when his high-cash position looked increasingly anachronistic.
But the last decade changed all that, as advisers that previously ranked more highly than Allmon became casualties -- first to the bursting of the Internet bubble, and then the credit crunch and associated bear market between 2007 and 2009.
The perspective necessary to appreciate Allmon's achievement is foreign to the great bulk of investors whose investment attention span is measured in months, if not weeks or days.
An ancillary investment lesson to be drawn from Allmon's approach is the power of compounding. This has been especially important in recent years, when his cash position has earned virtually no interest whatsoever. But the few stocks he owns have continued to perform well, especially on a total-return basis, since many have tended to pay handsome dividends -- stocks such as Altria Group Inc. (NYSE:MO) , Bristol Myers Squibb Co. (NYSE:BMY) , and Philip Morris International Inc. (NYSE:PM) .
As a result, he's produced returns that -- while not huge in any absolute sense -- are at least decent, and which are impressive relative to the market itself.
Over the last three years, for example, according to the Hulbert Financial Digest, Allmon's model portfolio has produced a 3.0% annualized return, in contrast to minus 8.1% for the overall market.
One thing that Allmon's approach does not offer is lots of excitement, however. So you probably won't be tempted by conservative approaches such as Allmon's.
But it's not fair to say that his approach is completely devoid of excitement, either -- though Allmon's sense of excitement may be different than that of the usual investor. Take the thousand-point mini-Crash which happened on the afternoon of May 6, an otherwise traumatic event that Allmon calmly surveyed from the comfort and safety of an 80%-cash position.
"I can tell you that those 20 minutes of hyper market activity ... were the most exciting of my over 50 years as an investor," Allmon wrote in his most recent issue. "The 22% Dow decline in a day in 1987 was an orderly affair by comparison."
Normally an opponent of government intervention in the marketplace, Allmon apparently is making an exception when it comes to eliminating the likely causes of May's mini-Crash: "Could this be the time to eliminate big-time professional gamblers who obviously believe they operate in a private market casino with computer-driven trading, devoid of human interference? All of Wall Street, and the American public numbering millions of investors, have much to lose should this recent phenomenon become the norm."
this is a good Q&A:
http://www.moneytalks.net/daily-upda...-prechter.html
his analysis to me is bang on, his conclusions are definitly a lot more bearish than myself though.
It's going to be an interesting day in Canada on Friday. We'll see how the US does tomorrow. Then I have to worry about market reaction to job numbers.
Benny, I know what you mean about pricing in the jobs. This market is so irrational though, and completely reactionary b/c no one has any idea where the hell we are going. So I think numbers will make a difference. More to the technical folks i'd guess.
good luck down there.
f*%kin BP and the oil disaster is driving me crazy. sad sad sad.
What's making investing difficult for me right now.
0% interest rates
and
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Mr. Market's grunting hard after the jobless claims #. Dow futures down 50, getting close...........
Moeghoul, your cracking me up with this shit.
In another thread you had commented that there was going to be a "Credit Event" that took the economy down. I think I found that event. Pretty scary reading if it proves to come true. Fucking BP is going to kill the GOM with the oil spill and may kill the worlds economies with it's CSO's if it fails.
http://www.zerohedge.com/article/gue...stating-lehman
http://jsmineset.com/2010/06/22/jims-mailbox-470/
Man, I hope this isn't it, but these guys makes a good case to this jong.
Never in U.S. history has the public chosen leadership this malevolent. The moral clarity of their decision is crystalline, particularly knowing how Trump will regard his slim margin as a “mandate” to do his worst. We’ve learned something about America that we didn’t know, or perhaps didn’t believe, and it’ll forever color our individual judgments of who and what we are.
i bought some stock today. just following my plan to buy on 5% declines. I'll buy a little more if the news is bad tomorrow.
Never in U.S. history has the public chosen leadership this malevolent. The moral clarity of their decision is crystalline, particularly knowing how Trump will regard his slim margin as a “mandate” to do his worst. We’ve learned something about America that we didn’t know, or perhaps didn’t believe, and it’ll forever color our individual judgments of who and what we are.
I added back some beat up miners and gold shares.
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