Altucher- Bears ae dead wrong, S&P to 1300 in 2010

[Ghost of Cutten]

Quote from zboy2854A:

Nope, I'm saying that neither the 2003 low nor the 2009 low were the ultimate lows for the markets during the current era of stagnation. That doesn't mean one should have just remained short the whole time. There is a big difference between investing during eras of stagnation versus eras of prosperity. During an era of stagnation (1929-1945, 1965-1982, 2000-2018 est.) there are several volatile and powerful cyclical bull and bear markets, with each successive cyclical bear leading to lower lows than the one that preceded it. One could theoretically remain short for the entire era (that started in 2000) and be profitable, but it is not the optimal strategy. The only way to properly trade during such eras is to trade both sides, i.e. to go long for the cyclical bulls and then sell and go short for the cyclical bears.

Once we enter another era of prosperity (likely 2020 +/- a couple years), buy and hold will once again be a viable strategy. Until then, during the current era we will see each successive cyclical bear lead to lower lows, and each successive cyclical bull lead to lower highs on an inflation adjusted basis.

So yes, going long in 2003 was the correct course of action. Then flipping to short in 2007-2008 was correct, going long last year, and now once again going short is the correct course of action. And probably some time around 2012 or so it will once again be time to go long again for the next cyclical bull, and so on until the current era of stagnation ends near the end of this decade.

This assumes impeccable timing ability, which few people have, and almost no one has consistently year after year.

IMO a better strategy for an era of low or negative long-term stock index returns is to be market neutral and look to outperform with stock selection. 2000-2010 has been a poor time to be long the S&P, but it has been an amazing 10 years for picking longs and shorts on the individual stock and sector level. And if a nice index setup comes along, then you can always put on some outright market exposure from time to time - you just aren't relying on it to generate your returns.

 

[Debaser82]

When you say to people buy gold and silver because they have gone up 2500% in a decade before and the same will happen again people think you are a nutcase and sollely living on unfounded hope taking past performance as a guarantee for future results.

Fair enough.

But...

When people say we have witnessed the greatest rally ever and if history is any guide chances are we are going down and down hard from here they use excactly the same logic as the one used by the goldbulls which is so heavily frowned upon by the 'level headed' investor.

So what's it going to be.... do we use the past as a guide for the future or is the future open and everything can happen depending on the circumstances?

I try to keep an as open mind as possible and go for the second option although I am largely exposed to a potential rerun of the metals spike of the seventies myself.

I guess to a certain extend everyone sees what he wants to see, both in the past as in the future.

 

[zboy2854A]

Quote from Trader666:

At your link for Kaplan's latest prognostication, he starts out with:

The U.S. dollar index is one of the most reliable leading indicators for global equity indices. Today's surge in the greenback to its highest point in more than ten months has very bearish implications for stock markets worldwide. --Steven Jon Kaplan

This is flat out WRONG. First, the U.S. dollar index is a coincident indicator at best and second, current levels are not very high despite being near the top of a 10 month range.

And you base this on what, exactly? Just because you say so? I suppose we should just ignore the Dollar index's historical role as a leading indicator during eras of stagnation, eh? Here's a newsflash for you, facts do not require you to agree with them for them to be true nonetheless.

Your certainty that it's "lights out" after possibly "one final orgiastic blow off top" is delusional. FACT is, neither you nor Kaplan (nor anybody else) has a clue.

Right, by all means feel free to ignore the guy who called exactly the collapse in 2008, and the most powerful rally since the Great Depression before it occurred in 2009. And it doesn't take a psychic to see what's coming, just someone willing to see the facts about the economy, historical leading indicators, and historical precedents to know what we are in for. What's that saying about leading a horse to water? But hey, you feel free to believe whatever you want there, chief. My brokerage account will keep growing no matter what you choose to believe.

 

[jj69]

Kaplan's views are corroborated by the two people I find most consistently accurate in their analysis of what's really going on in the economy- Michael "Mish" Shedlock and Meredith Whitney. I'll take their views over Jimmy C, James A or any one of the pundits on CNBC any day. And I do disctinctly remember James Altucher's interview with Erin Burnett just as the market was about to embark on its great slide, think the Dow was at around 13500 or so having come off the ultimate peak. The market in general was "dirt cheap" in his opinion. C'mon. Traders need this watching the paint dry market conditions to end, so please, bring on some volatility.
http://globaleconomicanalysis.blogspot.com/2010/03/eurozone-structural-problems-spains.html

 

[Debaser82]

Mish has been pounding the deflation table and suckers rally tune for so long it's getting a bit embarising but other than that...sure, he is certainly worth ones time.

 

[Trader666]

I base it on reality as opposed to you relying on your guru's opinion. A child graphing the U.S. Dollar index and foreign markets on the same axis would be able to see it's a coincident indicator at best, NOT a leading indicator. Time series analysis confirms it.

Quote from zboy2854A:
And you base this on what, exactly? Just because you say so? I suppose we should just ignore the Dollar index's historical role as a leading indicator during eras of stagnation, eh? Here's a newsflash for you, facts do not require you to agree with them for them to be true nonetheless.

LOLOL! The fact that you rely on the forecasts of a guru is laughable and pathetic. FACT is that NOBODY knows what's going to happen and basing your buy and sell decisions on a guru's market prognostications is a sucker's game. But since you're a sucker, you can't see that. Far better, as someone already said here, to pick individual stocks. If you're so sure of yourself, why aren't you betting the farm on out-of-the money index puts? Or hasn't your guru recommended that yet?

Quote from zboy2854A:
Right, by all means feel free to ignore the guy who called exactly the collapse in 2008, and the most powerful rally since the Great Depression before it occurred in 2009. And it doesn't take a psychic to see what's coming, just someone willing to see the facts about the economy, historical leading indicators, and historical precedents to know what we are in for. What's that saying about leading a horse to water? But hey, you feel free to believe whatever you want there, chief. My brokerage account will keep growing no matter what you choose to believe.

 

[Random.Capital]

If contrarianism has any value at all, Mr. Vishnu is going to exact many pounds of (monetary) flesh out of the bears flooding this thread.

It's like an echo chamber in here.

 

[ASusilovic]

Hum...are there any bearz left at all after the masacre from March last year entering into 2010 ?

 

[Ivanovich]

Quote from Random.Capital:

If contrarianism has any value at all, Mr. Vishnu is going to exact many pounds of (monetary) flesh out of the bears flooding this thread.

It's like an echo chamber in here.

Thus far, he's got the Fed on his side, hence he will win. But that will come to end shortly and then we may gaze upon the market in all it's (stupidity) glory.

 

[S2007S]

How many times are they going to reassure everyone about how the economy is unlikely to see another dip? These were the same people who didn't notice the crisis before and even during the time it took place. At least twice a week they continue to shout how sustainable this recovery is and that there is zero percent chance of another recession.



Recovery 'Sustainable,' No Double-Dip: Fed's Lacker
CNBC.com | April 06, 2010 | 07:53 AM EDT
The US recovery is "sustainable" and the economy is unlikely to see another dip, Jeffrey Lacker, President of the Federal Reserve Bank of Richmond, told CNBC_ Tuesday._

“Friday’s employment report is evidence that the labor market is bottoming out,” Lacker said .__

US nonfarm payrolls rose 162,000 in March, after February’s drop of 36,000. The unemployment rate held steady at 9.7 per cent for the third straight month, as expected.

Addressing public jitters over the Fed potentially raising the discount rate, Lacker indicated that there are huge amounts of reserves in the system, and that general sentiment is that the spread_ (between the discount rate and the fed funds rate) ought to remain at 50 (0.50 percentage points), rather than 100 basis points.__

“We won’t know what normal spread is until reserves are back to their normal operating range ,”_ Lacker said.

Futures retreated this morning ahead of the FOMC minutes, which will be announced at 2 pm ET today.