Back in the studio with Larry tonite, from 5:00
– 5:20 pm (I’m remote from NY).
We had an interesting conversation yesterday about the rally (off line), and when I can share it with you I’m sure you will find it quite intriguing.
Also in the studio are the always charming Elizabeth MacDonald of Forbes, and Gregory Church of Church Capital Management
Share it my ass…
He’s probably finally reading the First and Second Epistles to the Kudlownians.
“I Kudlownians” by Dr. Benber N. Anke…
…and “II Kudlownians” by Nouriel the Ranto-Matic-Roubini.
Was it me or did Kudlow seem a little bearish yesterday?
Lemme ask you a question?
….If the new objective du jour is to clean out all the equity in the known universe because soon there won’t be any left… then why suddenly should anyone want to sell the equity back into the market.
Wouldn’t that mean you’d then have to just go back and buy the crap again?
Is it possible that the supply-siders may wonder if they aren’t about to be ass-deep to a giraffe in supply and recken that maybe they ort to not want to be that deep?
Kudlow is a smart man. He’s beginning to sense problems and he’s willing to express his concerns.
I’ve never thought Kudlow is a fool. He’s just been too much of a sucker for the supply-side.
Hey, BR, I turned it on at 6 after. Nice to hear you get to say more than is normally allotted. Several times in the past there’s a cast of thousands on and not much gets said by any one person. Plus, you got a compliment from the gal. And that study out of CA saying only 1% of the market’s at risk? I’m surprised Kudlow served that up as rebuttal.
Barry: Nice tie. I think Liz has a crushhh on you!!!
So much for Larry’s 1 day of bearishness.
The stock market correction is over! Goldilocks won!
– Larry Kudlow (3/22/07)
The three bears are living in their SUV after the bank foreclosed on the McMansion. Goldilocks is a REO squatter with maxxed out credit cards. As the markets suggested yesterday, her plans for a meth lab must be working out.
How come you can’t see highlights of this video on CNBC.com?
There are a few hedge funds that are quite happy having computer programs make several thousand trades a day in order to net a fraction of one percent a day. They play their edge. and they make 35-40% a year. So are they any worse than a value investor making good returns over time? Both seem to rely on having a margin of safety. Betcha the quant has less volatility. I also think if you could have presented the odds and the results to B. Grahm he might have found the quant approach worth pursuing. But in his day the computer was between his ears and the printer said Dixon Ticonderoga.
The question I ask myself everday is “Is the situation still the same as I thought it was before and am I doing the right thing in that regards.” I think that is always the question no matter what you do in any market.
Of course markets get manipulated for finite periods of time, until the fundamentals eventually snap the whole thing back. People will be trying to game markets long after our grandchildren are dead. It has something to do with easy money.
Also please do not forget extreme situations can go on a lot longer than rationality might indicate.
But I do think the printing presses are spitting out dollars at an incredible rate and the debt matters when it starts to steer the boat. Then it is obviously excessive.
Wish we had videos of Barry on demand…..
(my luck we get videos of his kids!)
Alexd,
You are standing on a river bank observing a swimmer enter the water in full view of a sign that warns of crocodiles, and yet he begins to swim.
For any short observation of a stroke or two, the probability of the swimmer being taken is low. However, the longer the swimmer stays in the water and continues to stroke, the nearer the probability becomes 1.0 (100%) that the swimmer will be taken.
The hedge funds that pursue the strategy you describe are for long periods in the water and stroking beside the big crocs.
The systems they employ to supposedly shield themselves from risk may actually be the jaws of the croc, only unrecognized until they snap shut.
History is replete with crocs sunning themselves on the river bank, with bellies full of complacent swimmers.
Kudlow bearish yesterday? I think he was playing ball for a change, instead of reading G&3B.
Senator Dodd – this housing situation, IMO the wannabe homeowner borrower and the top dog lender are the loosers. The middle men salesmen made their paycheck, and so did the builders. Suppliers may need to place a property lean. More consumerism, judges and lawyers.
I’m wondering if these new instruments that you’all just invented, don’t know the name, lets you short/long regional property values, is gonna be a evil player here. And seems to me big time players could place bets, close a factory or two, and make the bet come in a winner.
What standard of living does Detroit need to succumb to compete with Hubei Province, China? Anybody wanna take that?
FHA intervening is a taxpayer bailout? If Wall Street eats the big one, whos paying for that?
Capitalism (& Socialism) always picks the worker/taxpayer pocket, cause its the only pocket.
Eclectic
I respect your observations. But I think that you might be confusing rapid computer arbitrage with arbitrary trend following and more conventional computer trading programs. If a fund is moving fractions of it’s funds in small but extremely rapid bursts and plays both sides of the market depending on the relationship of prices in the markets it trades in, when it has a mathamatical edge, and does not play if the opportunity is not there, holds positions for seconds, in extreley liquid markets and is flat at the end of the day, then I do not think it is equivalent to the traders who act like crodile chow as you described.
Where I think your analogy might fail is that even when the swimmer stops swimming and finds he can stand, the water is full of crocs. If the swimmer was invunerable to crocs instantly when he stopped swimming, as if he was magicly taken to a place invunerable to crocs then I think it might be closer.
I do see your point. I knew a guy who did well writing naked options, until the one time out of 12 the crocs got him and he lost it all in one bite. We always have to be aware of excess hubris and risk.
Thanks
By the way Taleeb’s book “The Black Swan ” is coming out. Sppeaking of risk….
Diversify your portfolio with Hemisphere Gold, Inc. (HPGI)
http://www.hemispheregold.com
Investor Relations: Call 888-548-8444
ir@hemispheregold.com
Alexd,
I see your points.