Former Bears’ Take on the Market’s Future
There is an interesting article discussing “Former bears” and their recent bullish views on the current markets.
It makes for interesting reading regarding some contrarian thinkers.
I am thrilled to be on any list that includes Ned Davis, Mark Hulbert, Bernie Schaffer, Jon Markman, Gary Shilling, and Jim Stack:
“Barry Ritholtz: Barry made one of the most accurate bottom calls this past spring; he was bearish as early as 2006. By 2007 he forecast a Dow decline to 6,800 but remained 95% invested until August 2007. In March 2009 he called for “the mother of all bear market rallies.” Currently he is 75% long, 25% cash, with a few hedges (SDS and QID) to protect profits. Barry expects increased volatility: a vicious, 20%-30% correction eventually, but sees no sign yet that the rally is running out of steam.”
Note that came out before our 5-15% pullback call last week.
The whole piece is worth a read . . .
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Source:
Former Bears’ Take on the Market’s Future
Money Show, October 18, 2009
http://www.moneyshow.com/investing/articles.asp?aid=editor-17988&iid=EDITOR&page=1
November 3rd, 2009 at 3:48 pm
http://www.cnbc.com/id/33598994
V-Shaped Recovery Will Last 2 Years: Wesbury
“I believe we’re in a V-shaped recovery that’s going to last for one-and-a half, two years,” Brian Wesbury, chief economist at First Trust Advisors, told “Squawk Box.”
Other economists have painted a bleaker picture, with one warning that if the stimulus money were to be pulled out, the world faced the risk of a 1930s depression.”
…Just to show you that you need not have ever been a “former bear” to be a whiz at prognostication. The rumour is that Wesbury, Abby Joseph Cohen, and Don Luskin have formed a trio called “The Three Amigos” (no, no one looks like Chevy Chase..) and will be touring the country praising the V-shaped recovery, that, actually never left since 1999….followers of TA (transcendental ahh..medication) have figured out that the bull market since that time had traced out the rare head and shoulders dandruff pattern not seen since 1893.
Wesbury will be signing autographs for his new book ” Dow 36 Million” at their first stop in inner city Detroit….
November 3rd, 2009 at 4:00 pm
@Bruce:
I think the subtitle of “Dow 36 Million” is “How I’m living proof that any idiot can get a job”
Why they waste airtime of this idiot is beyond me…
HCF
November 3rd, 2009 at 4:12 pm
Agnostics make money, come rain or come shine. You and Leuthold really put in the work and it shows. Thanks for the help.
November 3rd, 2009 at 4:26 pm
http://www.businessspectator.com.au/bs.nsf/Article/UPDATE-1-IMF-debt-high-too-early-to-adjust-fiscal–XFMBD?OpenDocument
IMF: global rates may need to rise 2%
WASHINGTON – Global interest rates may need to rise by as much as two percentage points to rein in increasing debt levels in major advanced economies, the International Monetary Fund said.
In its latest edition of “Cross-Country Fiscal Monitor” the IMF said government debt in the major economies is projected to reach 118 per cent of gross domestic product in 2014.
……Liquidity and equities….just thinking out loud………………….If the Scandanavians and the Australians are serious about raising rates……hmmmmmmmm….
November 3rd, 2009 at 4:33 pm
http://www.msnbc.msn.com/id/33552582/ns/business-retail/
Retailers scramble to adapt to new realities
“The recession has dramatically changed many Americans’ shopaholic habits, at least temporarily and perhaps forever.
Now the question is whether the nation’s retailers have kept up.
“The answer is no,” said Marshal Cohen, chief industry analyst with NPD Group.
He’s not alone in that assessment.
Although it’s still early days of the holiday shopping season, some analysts are already worried that too many merchants are taking a business-as-usual approach to an era that is anything but usual. Any miscalculation could be disastrous for retailers, who typically expect up to 20 percent of annual sales and a bigger share of annual profits during the critical holiday season.
“Retailers still don’t have a full grasp of reality,” said Burt P. Flickinger III, managing director of Strategic Resource Group, a consulting firm. ”
…Barry, I would be interested on your take on the retail until Xmas thinking…I see where the CFC temporarily lowered the increased savings rate, but I wonder what your firm sees for Xmas sales over the next 6 weeks…..
November 3rd, 2009 at 4:41 pm
Another positive SPX day tomorrow could shift me back to long. The chart is certainly looking like it wants to go higher with yet another higher low. The pattern seems to be repeating. If there is a fairly decent down day tomorrow, we could see 995 as the next stop. But I’m getting the feeling that it’s wanting to go to at least challenge the 1070 area again. Interesting. The auto sales caught me a bit by surprise today, let’s see what the jobs report brings tomorrow.
November 3rd, 2009 at 4:42 pm
Barry’s call was very good. I happened to do just about the same timing. With everyone else lately starting to aggressively go after puts I’m not so sure we are going to get another panic type crash over a month or two.
I closed all my shorts today.
Today I bought some Goldman and tomorrow morning I will be coming after the $150 Dec call that has no apparent premium right now. I actually like Goldman to continue going up in the next 3-5 months. I think they can sustain $5 a quarter earnings, especially if people are buying worthless puts for high $. I plan on aquiring GS and selling call options against it going forward.
I’m not sure about most every other thing in the market. most cos can’t sustain the earnings so they are cutting employees. It’s definately not good for the economy as a whole. If the fed makes the market rocket tomorrow some 2-3% up I will buy deep in the money no premium IWM puts.
November 3rd, 2009 at 4:45 pm
Bruce: I posted last week that I believe retailers don’t have the pricing power to meet the demands from stingy consumers. Last year due to large inventories and a lack of demand, they slashed prices to get rid of everything. The consumer is expecting those sort of discounts again this year. And with lighter inventories, retailers won’t have the ability to offer those discounts without destroying margins. Also factor in the shear amount of unemployed vs. last year. That’s a lot of people without the spending “power” they had a year ago.
November 3rd, 2009 at 4:46 pm
XMas season is boned, the ships that would have been carrying stuff for black friday from China did not sail, so unless they’re gonna start loading up a ton of jets with flat panel TVs and other high-price low-weight goodies there’s gonna be lots of empty stockings, unless they end up just selling through stuff they stocked months before..
Idling ships clog up Singapore shores:
http://news.bbc.co.uk/2/hi/business/8142838.stm
Distillate distress continuing for now:
http://ftalphaville.ft.com/blog/2009/11/03/81136/distillate-distress-continuing-for-now/
November 3rd, 2009 at 9:28 pm
johnborchers @ 4:42
Haven’t seen one of your posts in at least a year.
November 3rd, 2009 at 9:46 pm
Wait, what? Gary Shilling is bullish? On stocks? Hmm, I’m going to have to take a peak at that article I guess.
November 3rd, 2009 at 10:02 pm
OK, I see now. Not all those folks are bullish on stocks. Shilling definitely isn’t, though he did acknowledge the potential for a counter trend rally back before the rally really got going, I believe.
And one of these guys is Jack Ablin (who I’ve personally never heard of) that simply uses a 200 day MA strategy. Not that it isn’t a decent strategy to use (though far from perfect, especially in a secular bear market where you’re liable to be whiplashed all to hell), but why is this guy notable for simply using this very basic strategy?