You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Global Macro Trading Journal
- Thread starter Daal
- Start date
I enjoyed this piece from Mish Shedlock:
http://globaleconomicanalysis.blogspot.com/2011/08/yes-virginia-us-back-in-deflation.html
Mish goes through a range of indicators and concludes that the US is back in deflation. He also explains his reasons for why gold continues to do well despite the combination of deflation and falls in other asset prices.
http://globaleconomicanalysis.blogspot.com/2011/08/yes-virginia-us-back-in-deflation.html
Mish goes through a range of indicators and concludes that the US is back in deflation. He also explains his reasons for why gold continues to do well despite the combination of deflation and falls in other asset prices.
BTP daily trading range now smaller than GBL for a 3rd day in a row. The European bureau of Cental Planning (ECB) must be very happy.
I respect the views of others in this thread, regarding earlier in the week being a good time to buy quality companies at discounted prices. I also recognise that it is possible for these quality companies to remain flat / go up if and when the stockmarket breaks below the lows reached this week.
However my view is similar to that discussed in this article:
http://pragcap.com/6-facts-about-the-secular-bear-market
ie, absent super-reckless US monetary policy (as opposed to current reckless but not super-reckless policy), US equities remain in a secular bear market and will continue lower in the coming months / years.
Also presented are some thoughts from Acting Man:
http://www.acting-man.com/?p=9490
"Welcome Back To The GFC"
However my view is similar to that discussed in this article:
http://pragcap.com/6-facts-about-the-secular-bear-market
ie, absent super-reckless US monetary policy (as opposed to current reckless but not super-reckless policy), US equities remain in a secular bear market and will continue lower in the coming months / years.
Also presented are some thoughts from Acting Man:
http://www.acting-man.com/?p=9490
"Welcome Back To The GFC"
Quote from m22au:
I respect the views of others in this thread, regarding earlier in the week being a good time to buy quality companies at discounted prices. I also recognise that it is possible for these quality companies to remain flat / go up if and when the stockmarket breaks below the lows reached this week.
However my view is similar to that discussed in this article:
http://pragcap.com/6-facts-about-the-secular-bear-market
ie, absent super-reckless US monetary policy (as opposed to current reckless but not super-reckless policy), US equities remain in a secular bear market and will continue lower in the coming months / years.
Also presented are some thoughts from Acting Man:
http://www.acting-man.com/?p=9490
"Welcome Back To The GFC"
Like the myth that the 1930's were one long Grapes of Wrath (the U.S. actually had several quarters and years of rocketing growth during this decade), there is another myth that stocks were a disaster from 1966-1982. This is distorted by the major drop in the middle of that period. In fact, there were plenty of bull markets and lots of money made during this period. I guarantee you that anyone who bought blue chips in 1975 was not complaining in 1982.
It's important to get past the simplistic headlines when talking about the GD and important to get away from looking at the DJIA in 1982 vs DJIA in 1966 and saying, gee that sucked.
Might the DJIA still be 11K in 10 years? Sure. Doesn't mean that good companies - BOUGHT AT THE RIGHT PRICE - and making lots of money, won't still offer a great return to their owners.
A bit more on the above. I know some will point to Japan, where companies selling for less than the cash on their balance sheets 10 years ago, haven't moved a bit. Corporate governance and takeover policy are quite different in Japan than the U.S. though.
Shareholder value is off much more import in the U.S. and no board will stick around for long if they do the kind of shenanigans Japanese boards do with regularity.
Even a company as big and powerful as MSFT will find its board and CEO not immune to shareholder protest if it doesn't get it's act together (stock would jump 50% in a month if Ballmer resigns).
Shareholder value is off much more import in the U.S. and no board will stick around for long if they do the kind of shenanigans Japanese boards do with regularity.
Even a company as big and powerful as MSFT will find its board and CEO not immune to shareholder protest if it doesn't get it's act together (stock would jump 50% in a month if Ballmer resigns).
Instinctively, that appears logical. I checked a couple of random Dow Components from 1975 (IP, GT, DD, XOM, PG, EK) and was surprised to find that except for XOM all were around the same price or lower in 1982 compared to 1975. If you factor in 5% dividends and 9% average inflation for a ball-park real total return estimate during the period then that was really a sub-par seven years buy & hold blue chips.Quote from ralph00:
I guarantee you that anyone who bought blue chips in 1975 was not complaining in 1982.
I find this consensus that short sale bans are guaranteed to lead to lower share prices a bit suspect. MAYBE that is true in the short-run (though I don't want to jump in that idea with a sample size of 1)
There is something about equities being down so much the government gets upset about it that just screams contrarian indicator
There is something about equities being down so much the government gets upset about it that just screams contrarian indicator