by ilene - August 1st, 2010 1:01 pm
Courtesy of Doug Short
It’s time again for the weekend update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.
This chart is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000.
Here is a nominal version to help clarify the impact of inflation and deflation, which varied significantly across these three markets.
Note: These charts are not intended as a forecast but rather as a way to study the today’s market in relation to historic market cycles.
by ilene - July 31st, 2010 3:07 pm
Courtesy of Edward Harrison at Credit Writedowns
David Tice, chief portfolio strategist for bear markets at Federated Investors Inc, talks about the outlook for the U.S. economy. He sees a double dip coming and argues against stimulus to prevent it, saying policy makers shouldn’t act as “Good Time Charlie” preventing the deleveraging of U.S. households.
by ilene - July 18th, 2010 1:48 pm
Courtesy of Andy Kessler
Bull markets, it is said, climb a wall of worry. Smart investors buy in early when worries about profits or inflation or wars scare away the faint of heart. Latecomers then bid up stocks as each worry becomes unfounded, until there is nothing left to worry about. Once there is only good news, the market peaks as there is no one left to buy.
Bear markets, on the other hand, fall into what I like to call the pit of doom. Forget about worries—actual bad stuff happens, until nothing bad is left to happen and the market bottoms as there is no one left to sell.
From early May through last week, the market dropped 1500 points into the pit, on the backs of gushing BP oil, riots in Europe, a 30% drop in pending home sales and the news that maybe your next door neighbor is a Russian spy. But now we’ve seen 680 Dow points added over seven straight up days before a slight decline yesterday. What the heck is going on?
by ilene - January 4th, 2010 4:54 pm
Market Bears – what sub-species are you? "Outwardly concerned with the instability of economies and markets yet cannot resist the urge to speculate in gold stocks"--if that rings true, you’re a David RosenBear. Now you know. – Ilene
(read the below in an exaggerated Australian accent, like that guy who took bubble baths with great white sharks and electric eels but for some strange reason died in a freak animal incident.)
Krikey! This landscape is litrelly filled with Market Bears! But wait just a tick – there appear to be many different types of bears running about…all with different attributes and markings to help us tell them apart.
Let’s have a peak through the binoculars and see what we’ve got:
The Born-Again Bear (Ursus Scottradeum) - this creature was horribly wounded during two prior market crashes while remaining long and margined to the hilt. Has since sold entire portfolio at the bottom, subscribed to RGE Monitor and delights in telling the members of his old investment club what morons they are. Can be found roaring "bwahaha" at other investors on the Yahoo Finance message boards.
The Perma-Bear (Ursus Abelsonious) – the very definition of "creature of habit", Perma-Bears are right 2% of the time but tedious and pedantic 100% of the time. By never conceding the fact that anything could even possibly be a positive, they render themselves irrelevant, even during actual bear markets. Many, however, are brilliant and lovable, despite their unwillingness to change or concede.
The Conspiratorial Bear (Ursus Tinfoilicon) – A highly adaptive sub-species of the Perma-Bear. These animals are known for their over-perspicacity and have foreseen 11 of the last 3 market corrections due to a light social calendar and a fondness for Data-mining & Dragons. They are, however, always the most interesting bears to behold in the forest and serve the important role of keeping the other woodland creatures on their toes and alert.
The David RosenBear (Ursus Aurum Minotur) – a species that is outwardly concerned with the instability of economies and markets yet cannot resist the urge to speculate in gold stocks. He will justify his "playing" of precious metals with myriad warnings of inflation, deflation, mega-flation, Gaga-flation etc, but in reality, he is banking on the greater…