It is an understatement to say Michael Belkin is somewhat skeptical of all the bullish sentiment around these days — and in response to that, he put together a list of his favorite “reasons” to be bullish:

 

Top 10 Reasons to be Bullish in 2013

1) Congress and the Administration have spending, taxes and the budget deficit completely under control. Fiscal imbalances have been solved and won’t be a problem for the economy or markets anymore.

2) S&P500 earnings are declining and everyone knows stocks go up when earnings go down.

3) Hedge funds have their highest stock market exposure since just before the last time the S&P500 tumbled 50%. 10,000 hedge funds controlling $2 trillion can’t be wrong.

4) NYSE margin debt of $327 billion is the highest since Feb 2008. Forthcoming margin calls like those of 2008 are bullish, because leveraged investors will be forced to liquidate into a declining market.

5) Taxes are going up and government spending growth is going down – which Keynesian economists agree stimulates economic growth, corporate earnings  and the stock market.

6) Bernanke has deliberately squeezed investors into equities and the Fed has a perfect contrary record at preventing the last two 50% S&P500 bear markets during 2001-02 and 2007-09. Don’t fight the Fed.

7) Goldman is in bed with the Fed and bullish GS bigwigs say buy cyclicals. Don’t fight the squid.

8) Apple’s gargantuan $160 billion market cap loss (-24%) since September 19th is a generational stimulative event, since AAPL was a top 10 holding of 800 hedge funds and mutual funds at the end of Q3 2012.

9) Even if the market somehow goes down, every other portfolio manager will be down too – so your fund’s investors won’t care and won’t redeem their money.

10) 90% of market strategists and analysts polled by Reuters have a higher end-2013 market forecast. The sell-side consensus is always right and since they anticipate bear markets with pinpoint precision – this is an enormous  green light.

Go forth and speculate.

 

Copyright © Jan 1, 2013 Belkin Report. All rights reserved

Category: Humor, Investing, Psychology

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

19 Responses to “Belkin: Top 10 Reasons to be Bullish in 2013”

  1. grimreaper says:

    Outstanding. Reading your column while watching you on Bloomberg.

    Keep ‘em honest, Barry.

  2. Lukey says:

    LOL! I agree, though – not much to build a rally on this year. But Mr. Market seems inclined to go up right now so I’m a bit over 50% long (and even added marginally to a few positions yesterday) but I’ve got a twitchy finger on the eject button.

  3. [...] Michael Belkin's Top Ten Reasons to Be Bullish in 2013 will put you into a Ben & Jerry's depression coma.  (TBP) [...]

  4. Mr. Belking is too brilliant to be dismissed and, once again, he may be proven right in his assessment.

    However, there two aspects that seem to support the bullish case for stocks that are worth mentioning.

    If physical gold were about to go sky high, the USD and long-term bonds would be in jeopardy. Under such scenario stocks, albeit to a lesser extent percentage wise, would be ready to go up.

    Blogger Fofoa, with all caveats and disclaimers, seems to believe that 2013 could witness a massive revaluation of physical gold (please mind the word “physical”, not “paper”).

    http://fofoa.blogspot.com/2013/01/the-two-legged-dog.html

    If this were to materialize stocks are going to go up and not down, at least in nominal terms, as happened during the Weimar Republic.

    The Dow Theory has signaled a primary bull market on January 2. Such technical bullishness suggests that, at the very least, this is not a stock market to short:

    http://www.dowtheoryinvestment.com/2013/01/dow-theory-special-issue-asse

    One thing is clear: The fundamentally bearish case is at odds with the technical reading. We should bear in mind that 70% of the Dow Theory primary bull market signals end up with profits. We don’t know now whether the current bull market signal will be a failed one (30% odds) or a successful one (70% odds).

    Regards.

  5. ironman says:

    Too funny!

    And as for going forth and speculating….

  6. 3) Hedge funds have their highest stock market exposure since just before the last time the S&P500 tumbled 50%. 10,000 hedge funds controlling $2 trillion can’t be wrong.

    and ‘their’ largest (Equity) holding..
    —8) Apple’s gargantuan $160 billion market cap loss (-24%) since September 19th is a generational stimulative event, since AAPL was a top 10 holding of 800 hedge funds and mutual funds at the end of Q3 2012.

    are, to me, the ‘worst’ of it (these points)..

    in, more, ‘normal’ Times, People would be, well-, advised to ‘head for the Hills’..

    though, with..

    6) Bernanke has deliberately squeezed investors into equities and the Fed has a perfect contrary record at preventing the last two 50% S&P500 bear markets during 2001-02 and 2007-09. Don’t fight the Fed.

    those, saidsame, “People” are, rather, ‘lashed to the Bow’–destined to break the Waves, come H***, or High Water..(at least, in re: Financially denominated Instruments..)

    past any of that, when here.. http://www.literature.org/authors/carroll-lewis/through-the-looking-glass/ as ‘We’ *are..

    a fine List.

  7. Old Rob says:

    Looks like BR is providing us with some comic relief with cut-and- paste most likely from the NYT.

    With the DC crowd depressing us so much, we need the ‘distraction’.

    Another suggestion: do a word count on the most overused words from the media or conversation regarding the economy or politics. A good starting might be, distraction, compelling, yada-yada, etc.
    Might be fun in the dour situation.

  8. denim says:

    Thanks. Points well made with sarcasm stick in the mind or at least wake it up.
    Re: Hoffers “Don’t fight the Fed.” It is a guess on my part but I think the Fed tries to stabilize the DJI, DJT, GSPC, & maybe the Russell 2000 indices. Those indices do reflect the current bid value of the “means of production” of the US economy’s GDP. Would you not do that as the Fed, if you could?

  9. Concerned Neighbour says:

    A man after my own heart.

    Of course, many of these points have been equally true in the past few years as well, and that hasn’t stopped central banks from pumping up just about everything with a pulse. I really don’t see how people who can look beyond the next QE fix could rest easily with money in these “markets”, such as they are.

  10. comet52 says:

    Hey look, sarcasm.

  11. torbelum says:

    No, the sold-out bull is pure evil – ferociously outspoken or slyly suggestive, he is all the time engaged in a singular mission: Scaring others out of the investments that he would like to buy back himself at lower prices.

    The sold-out bull is a sickly creature, a thrashing fish on the deck of a ship, out of its element and sucking at the air for one more breath. Every trick will be employed, from fiery sermons of impending doom to sarcastic asides about the dopiness of those who are still in.

    The sold-out bull is desperate and his mind is twisted, every thought and expenditure of energy is employed toward the creation of a lower entry back into the markets. Only a cheaper buy-in will vindicate the earlier decision to sell that haunts him so.

    Steer clear of the sold-out bull, for the ferocity of his bearishness comes from somewhere very dark and extremely cold. He will hurt you if he can, climb over your body to get back in.

  12. JimRino says:

    5) Taxes are going up and government spending growth is going down – which Keynesian economists agree stimulates economic growth, corporate earnings and the stock market.

    But Fox News told me the World would End if we didn’t pay down our debt.

  13. [...] Ten reasons to NOT be so bullish in 2013.  (Big Picture) [...]

  14. peacock says:

    I am bear towards irony.

  15. Smokefoot says:

    Isn’t #10 always true? If the sell-side analysts are always bullish then we can’t use them as a contrary signal.

  16. boveri says:

    Made my day. Thanks

  17. [...] Ten reasons to NOT be so bullish in 2013.  (Big Picture) [...]

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