Comments on: Words from the investment wise 11.29.2009 http://www.ritholtz.com/blog/2009/11/words-from-the-investment-wise-11-29-2009/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:28:32 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: The Eighties » Blog Archive » Fast Monday links http://www.ritholtz.com/blog/2009/11/words-from-the-investment-wise-11-29-2009/comment-page-1/#comment-237998 The Eighties » Blog Archive » Fast Monday links Sun, 29 Nov 2009 16:34:56 +0000 http://www.ritholtz.com/blog/?p=44978#comment-237998 [...] http://www.ritholtz.com/blog/2009/11/words-from-the-investment-wise-11-29-2009/The government of Dubai requested a six-month payment freeze on the $59 billion debt issued by Dubai World – a state-owned conglomerate that has become known for its extravagant real estate projects. Worries about Dubai’s debt woes … For example, among mature markets the Japanese Nikkei 225 Index (-4.4%) recorded a fifth consecutive down-week, suffering from the strong Japanese yen that recorded a 14-year low versus the US greenback. On the other hand, the Brazillian … [...] [...] http://www.ritholtz.com/blog/2009/11/words-from-the-investment-wise-11-29-2009/The government of Dubai requested a six-month payment freeze on the $59 billion debt issued by Dubai World – a state-owned conglomerate that has become known for its extravagant real estate projects. Worries about Dubai’s debt woes … For example, among mature markets the Japanese Nikkei 225 Index (-4.4%) recorded a fifth consecutive down-week, suffering from the strong Japanese yen that recorded a 14-year low versus the US greenback. On the other hand, the Brazillian … [...]

]]> By: Climategate http://www.ritholtz.com/blog/2009/11/words-from-the-investment-wise-11-29-2009/comment-page-1/#comment-237997 Climategate Sun, 29 Nov 2009 16:33:55 +0000 http://www.ritholtz.com/blog/?p=44978#comment-237997 Images for those who has missed the rally and continues saying that the fundamentals do not justify the recent bounce off March lows: Jobless Claims: http://i49.tinypic.com/20t1fuo.gif <a href="http://tinypic.com" rel="nofollow"></a> [IMG]http://i49.tinypic.com/20t1fuo.gif[/IMG] Flipped Jobless Claims (to better illustrate the point -- it looks like S&P) http://i45.tinypic.com/2zzrudz.gif <a href="http://tinypic.com" rel="nofollow"></a> [IMG]http://i45.tinypic.com/2zzrudz.gif[/IMG] Images for those who has missed the rally and continues saying that the fundamentals do not justify the recent bounce off March lows:

Jobless Claims:
http://i49.tinypic.com/20t1fuo.gif

[IMG]http://i49.tinypic.com/20t1fuo.gif[/IMG]

Flipped Jobless Claims (to better illustrate the point — it looks like S&P)
http://i45.tinypic.com/2zzrudz.gif

[IMG]http://i45.tinypic.com/2zzrudz.gif[/IMG]

]]> By: Climategate http://www.ritholtz.com/blog/2009/11/words-from-the-investment-wise-11-29-2009/comment-page-1/#comment-237994 Climategate Sun, 29 Nov 2009 16:07:04 +0000 http://www.ritholtz.com/blog/?p=44978#comment-237994 "In my opinion, stock markets have run too far too fast – driven by an avalanche of liquidity – and they have moved out of alignment with economic and earnings growth that may not live up to the expectations being priced into equity valuations. I will bide my time while the fundamentals play catch-up." Such arguments are one-sided and wrong. Why are you using March lows as a reference point? Do you really believe that March lows were justified by the fundamentals? The markets were irrationally oversold in March. The selling was driven by fear and by forced liquidations, not by the fundamentals. The recent bounce back from March lows was a correction back to fair value -- correcting back from irrationally oversold levels to the levels justified by the fundamentals and significantly improving credit markets. In addition, the markets are forward looking. Based on historical averages, the markets are not expensive at all. If you wait for "the fundamentals play catch-up", you will miss yet another rally. “In my opinion, stock markets have run too far too fast – driven by an avalanche of liquidity – and they have moved out of alignment with economic and earnings growth that may not live up to the expectations being priced into equity valuations. I will bide my time while the fundamentals play catch-up.”

Such arguments are one-sided and wrong.

Why are you using March lows as a reference point?

Do you really believe that March lows were justified by the fundamentals?

The markets were irrationally oversold in March. The selling was driven by fear and by forced liquidations, not by the fundamentals.

The recent bounce back from March lows was a correction back to fair value — correcting back from irrationally oversold levels to the levels justified by the fundamentals and significantly improving credit markets.

In addition, the markets are forward looking. Based on historical averages, the markets are not expensive at all. If you wait for “the fundamentals play catch-up”, you will miss yet another rally.

]]> By: Words from the investment wise (11.29) | The Big Picture http://www.ritholtz.com/blog/2009/11/words-from-the-investment-wise-11-29-2009/comment-page-1/#comment-237988 Words from the investment wise (11.29) | The Big Picture Sun, 29 Nov 2009 15:29:55 +0000 http://www.ritholtz.com/blog/?p=44978#comment-237988 [...] Disclosures « Words from the investment wise 11.29.2009 [...] [...] Disclosures « Words from the investment wise 11.29.2009 [...]

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