Posts Tagged ‘crowds’

What’s the Shape of Your Recession?

What’s the Shape of Your Recession?

Courtesy of Tim at Psy-Fi Blog

Man Using Binoculars

Clueless Commentators

Over the past few years we’ve had endless economic experts opining on the nature of the recession. From initial hopes of a bouncy V shaped recovery we moved onto a sluggish U and then a very droopy looking L before a dose of government pump-primed financial Viagra re-erected the idea of the V. More pessimistic predictors – mainly those who originally plumped for a U or an L – are now hopefully suggesting that we’ll get a double-dip W or a triple-dip VW in an attempt to save their remaining credibility.

Of course, the reality is that none of them have the faintest clue because none them possibly can have the faintest clue. We are, as always, in the uncharted waters of the future. The only letter that needs apply is the X that marks the spot where we bury the commentators and their useless predictions.

Blithe Ignorance

Right Idea! Wrong Planet! with trash can

As we’ve sailed on through the treacherous shoals of economic uncertainty people have naturally looked to the world’s experts for advice. Occasional suggestions by central bankers, who actually have the real data to analyse, that they don’t have a clue what’s going to happen have resulted in shudders across world markets. Meanwhile commentators have happily carried on making essentially random predictions based on their thirty years or so experience of largely benign economic times. It’s like watching a weather forecaster from Hawaii trying to make predictions for the Mid-West: amusing, but not terribly helpful.

In fact, as economies have uncertainly recovered we’ve seen the standard reactions by experts who’ve been caught out (see You Can’t Trust The Experts With Your Investments). Many have simply ignored the fact that they were wrong and have blithely continued to make further predictions; presumably on the grounds that yesterday’s media makes tomorrow’s lining for kitty litter trays. Others have opted for the standard “I was right, but not yet” or “I was wrong, but for the right reason” responses as though getting your timing wrong about the world economy and causing people to flee into overpriced government bonds just as the biggest stockmarket rally in history kicked off is a normal sized mistake.

The highly respected John Authers of the Financial Times is…
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Overly Optimistic Consensus Plays Greater Fools’ Game Once Again

Overly Optimistic Consensus Plays Greater Fools’ Game Once Again

bigger foolCourtesy of Mish

The crowd is often right except at market turns. After the turn, the crowd tends to holds on until most previous gains vanish. In a secular bull market, such optimism works out acceptably well. In a secular bear market, rampant optimism is severely punished.

David Rosenberg is discussing the overly-optimistic consensus in a Special Report: A “V”-Shaped Recovery.

One Overvalued Market

There has been plenty of debate over whether equities are overvalued or not, and certainly we would assume that many investors know where we stand on the topic.

On an operating (“scrubbed”) basis, the trailing P/E multiple on the S&P 500 has expanded a massive 10 points from the March lows, to stand at 27.6x.

While we will not belabour the point, when all the write-downs are included, the trailing P/E on “reported” earnings just widened to its highest levels in recorded history of nearly 140x, which is three times the levels prevailing during the height of the tech bubble.

PE Expansion

It is interesting to hear market bulls talk about how distorted it is to be using trailing multiples that include ‘recession earnings’ (even though using ‘forward’ earnings means relying on consensus forecasts on the future and these are rarely, if ever, correct). It is also interesting that the last time the multiple was this high was back in March 2002, again after a huge countertrend rally that deployed ‘recession earnings’ from the 2001 downturn. If memory serves us correctly, this was right around the time that the bear market rally started to roll over and in fact, six months later, the S&P 500 was hitting new lows and 34% lower than it was when the multiple had expanded to … today’s level!

Even On A Forward Basis, The Market Is Overvalued

Bullish analysts like to dismiss the actual earnings because they are “depressed” and include too many writeoffs, which, of course, will never occur again.

The consensus is usually overly-optimistic, which is why so many analysts love to do their analysis on “forward” earnings since the market almost always looks “attractively priced” on that basis. The reality is that the forward P/E multiple is now at 16.2x after bottoming at 11.7x at the market lows. The multiple has not been this high since February 2005


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ValueWalk

Emerging Markets Stocks And ETFs For 2021

By Matthew Levy. Originally published at ValueWalk.

There’s not a rigid definition of what an emerging market is. For example, China is still the leading country in many emerging market ETFs and funds. But is it fair to consider China an emerging market any longer? It has nearly 1.4 billion people and was the only major economy globally to see GDP growth in 2020.

Q4 2020 hedge fund letters, conferences and more

That’s like calling Giannis Antetokounmpo an up and coming superstar despite winning the last two NBA MVP awards.

But even if I did see ...



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Kimble Charting Solutions

S&P 500 Testing Top Of 30-Year Rising Channel, Says Joe Friday

Courtesy of Chris Kimble

Do charts have memories? Can prices as far back as 45-years ago impact prices today? I understand if you answered both questions with a resounding no.

In my humble opinion, an important test of these questions comes into play at current prices in the S&P 500 at (1).

This chart looks at the S&P 500 on a quarterly basis since the late 1950s, where Fibonacci was applied to the 1974 lows and the 2000 & 2007 highs. The 261% Fibonacci extension level comes into play at (1), which is the 3,900 level in the S&P.

At the same time,...



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Zero Hedge

Here's What NatGas Bulls Are Betting On In The Next Month

Courtesy of ZeroHedge View original post here.

Weather models continue to suggest warmer than average temperatures this month across much of the US from the South to the Northeast. Warmer trends could continue next month, pressuring natural gas prices as demand crumbles. However, natgas bulls are closely watching the Polar Vortex and Madden Julian Oscillation for any shifts. 

Kirk Hinz, meteorologist in charge at US-based ...



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Phil's Favorites

The Stock Market and Crypto Market Are The Ultimate Platform and Game

 

The Stock Market and Crypto Market Are The Ultimate Platform and Game

Courtesy of Howard Lindzon

When I was a kid I played ‘Pong’ and ‘Space Invaders’ and Coleco Football and Mattel ‘Intellivision’.

In college I stopped.

Maybe if there were smartphones and no women, I would still be a ‘gamer’, but my generation was looking up not down.

I found the markets because I needed a first job and I was hooked.

It has been a battle of wits and behavior since. The markets have brought me to panic and fear on many occasions but most...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Saturday, 11 July 2020, 05:26:16 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: This is lack of liquidity means support is likely to break if it is tested hard!



Date Found: Saturday, 11 July 2020, 09:51:58 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Nasdaq losing momentum.



Da...

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Politics

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

 

What is the 'boogaloo' and who are the rioters who stormed the Capitol? 5 essential reads

Rioters mass on the U.S. Capitol steps on Jan. 6. Samuel Corum/Getty Images

Courtesy of Jeff Inglis, The Conversation

In the wake of the insurrection on Jan. 6, the U.S. is bracing for the possibility of additional violent demonstrations and potential riots at the U.S. Capitol and state capitol buildings around the nation. W...



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Biotech/COVID-19

The simple reason West Virginia leads the nation in vaccinating nursing home residents

 

The simple reason West Virginia leads the nation in vaccinating nursing home residents

By mid-January, only about a quarter of the COVID-19 vaccines distributed for U.S. nursing homes through the federal program had reached people’s arms. Paul Bersebach/MediaNews Group/Orange County Register via Getty Images

Courtesy of Tinglong Dai, Johns Hopkins University School of Nursing

The urgency of vaccinating nursing home residents is evident in the numbers. The COVID-19 pandemic has claimed the lives of mo...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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Digital Currencies

Bitcoin: why the price has exploded - and where it goes from here

 

Bitcoin: why the price has exploded – and where it goes from here

B is for blast-off (but also bubble). 3DJustincase

Courtesy of Andrew Urquhart, University of Reading

Bitcoin achieved a remarkable rise in 2020 in spite of many things that would normally make investors wary, including US-China tensions, Brexit and, of course, an international pandemic. From a year-low on the daily charts of US$4,748 (£3,490) in the middle of March as pandemic fears took hold, bitcoin rose to ju...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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