JS Global Macro Notes

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Uncle Ben's to compete against Apple with brand new smart-phone

http://www.theonion.com/articles/uncle-bens-to-compete-against-apple-with-brandnew,28892/

I give 'em same odds as MSFT and Steve "Monkeyboy" Ballmer

#lolballmer
 
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Apple price share drop seen as buying opportunity as iPhone 5 looms

http://www.reuters.com/article/2012...ource=dlvr.it&utm_medium=twitter&dlvrit=56943

The above shows the first rule of being a Wall St analyst: Never change your opinion, EVER... or rather, never change your opinion until laughably after the fact, when a frying pan has hit your clients in the face.

The stubborn refusal of investors to 1) manage risk, and 2) adjust to new information, explains why trend opportunities exist.

When information countering a popular thesis arises, the first instinct of the public (and of Wall St) is to discount it / ignore it, regardless of how risky it may be to do so. (This also works on the upside, when slow-footed managers and analysts take too long to acknowledge / embrace a positive shift in trend.)

Now it may in fact be that, in this instance, "buying the dip" in anticipation of the iPhone 5 works out. The AAPL earnings miss is just one case.

But if the dip buyers are wrong - if the 5 has some new SIRI issue, or uptake is slower than expected bc more people are satisfied with the 4s, or some such thing - then what you get is a "strike 2" where a lot of buyers long from a higher average price are forced to puke up their positions via increased risk on averaging down, even as long-term believers in the "unstoppable AAPL" meme see their faith shaken to the core.

In which case, the lack of risk management plus doubling down on adverse movement merely winds up fueling a new short to intermediate term downtrend. When the bulls are stubborn and proven wrong double, they merely become fodder for the bears (and vice versa).

There will always be opportunities in markets, both long and short, as long as 1) risk is managed poorly (or ignored), and 2) Wall St and the public are slow to adapt their preferred outlooks to relevant new information.

Which means there will always be opportunities, period, as neither of those factors are ever going to change.
 
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Fed moves closer to action:

http://online.wsj.com/article/SB10000872396390444025204577547173267325402.html

Apparently this is the driver for the premarket futures pop - Hilsenrath is the designated Fed mouthpiece. EURUSD also firming, up 60 bips and holding 1.21.

Weak hopes of QE3 the best the bulls can do? Laaame...

p.s. The money paragraphs:

Amid the recent wave of disappointing economic news, conversation inside the Fed has turned more intensely toward the questions of how and when to move. Central bank officials could take new steps at their meeting next week, July 31 and Aug. 1, though they might wait until their September meeting to accumulate more information on the pace of growth and job gains before deciding whether to act.

Fed officials could take some actions in combination or one after another. Fed Chairman Ben Bernanke, in testimony to Congress last week, listed several options under consideration, including a new program of buying mortgage-backed or Treasury securities, new commitments to keep short-term interest rates near zero beyond 2014 or an effort to push already-low benchmark short-term interest rates even lower.
 
Back in the early/mid 90's the WSJ would do a story about Rogers, or mention him in the course of doing a story. It was usually negative slanted, and I really didn't understand why. Maybe they didn't like his folksy aphorisms? Wasn't he a gloom and doomer back then too?

Anyway, he did and interview for the book Market Wizards, and when the interviewer mentioned the OCC in a discussion about options, Rogers appeared to not know what it was, or even aware that it existed.

Here's a quote from him: "If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia." I don't agree with that at all. There is no advantage to him by moving to Singapore. He appears to be portraying a created image of himself.
 
someone here on ET once posted a chart of the Shanghai stock market index and superimposed a picture of his book, "A Bull in China" on the chart on the date that it was released. The market tanked right after the book's release.
 
Quote from hughb:

Back in the early/mid 90's the WSJ would do a story about Rogers, or mention him in the course of doing a story. It was usually negative slanted, and I really didn't understand why. Maybe they didn't like his folksy aphorisms? Wasn't he a gloom and doomer back then too?

Anyway, he did and interview for the book Market Wizards, and when the interviewer mentioned the OCC in a discussion about options, Rogers appeared to not know what it was, or even aware that it existed.

Here's a quote from him: "If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if you are smart in 2007 you move to Asia." I don't agree with that at all. There is no advantage to him by moving to Singapore. He appears to be portraying a created image of himself.
More...


Yeah... "Investment Biker" was the book that introduced me to markets -- discovered by accident as an English and Philosophy major -- so I always had a soft spot for ol' Jimmy. Met him in 2006 and he seemed really cool.

But ever since then, he's been saying the same things... he practically could have submitted a video to CNBC et al and just played it on loop instead of making new appearances.

And always the same cliches: "Buy land. Be a farmer. Move to China." Less and less subtlety and nuance as time went by.

I don't get what happened... he got lazy and simplistic for some reason. When he was at Quantum, Soros said he was superhuman and did the work of six analysts. Maybe he burned out.
 
Quote from hughb:

someone here on ET once posted a chart of the Shanghai stock market index and superimposed a picture of his book, "A Bull in China" on the chart on the date that it was released. The market tanked right after the book's release.
More...

Also, re, China, one of the funniest things about Jimmy overall is that he hates the Fed and rails against all forms of manipulation, central planning, government assault on free markets etc -- yet worships the mandarins in Beijing!

Talk about cognitive dissonance... I have never understood the China bulls whose optimism remains wholly untempered by the realities of a corrupt, authoritarian, command and control economy. When it works it can really work -- see Japan in the 80s -- but when the ship needs to turn it's a disaster.
 
The Bernanke Cargo Cult: Bankrupt Policy for a Bankrupt Generation

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There is a class of equities we call "cult stocks."

Roughly speaking, a cult stock is a high-growth concept stock, with an extraordinary degree of emotionally invested ownership.

The classic cult stock typically has all of the following:

* An excellent story
* Excellent earnings / growth trends
* Leadership in its market space
* Membership in a "top 50 / top 100" list
* Plenty of "blue sky" potential

When a stock has all the above, investors and money managers gain the courage to dream. With quarter after quarter of outperformance, optimism is entrenched as the feedback loop self-reinforces...

Read full commentary here
 
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