Mark Cook: 29% correction in March 2007

Quote from RL8093:

Mr. Cook has proven himself to be a great trader and by many measures the markets are overextended and due for a correction (sell in May??). However, his credibility as a prognosticator is not aided by the fact that his bearish forecasts started back in 2005 (or before?) ...
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Exactly. Mark Cook is a geek and a loser for the same reason I am in forecasting - he fails to understand that "something is fundamentally different this time".

I will borrow from the great bear weekly columnist, Doug Noland:

"During the first quarter, the Liability “Fed Funds and repos” jumped $44.4bn at Citigroup and $56.7bn at JPMorgan. Goldman, Lehman, Bear Stearns, and Morgan Stanley combined for a $100 billion increase in “Repo” Liabilities, a 77% annualized growth rate. It is worth noting that the first quarter increase in “fed funds and repo” from these six institutions alone ($201bn) was larger than total M2 growth ($160bn) during the period. Over the past year, the Liability “fed funds & repo” increased 41% at Citigroup to $393.7bn and 45% at JPMorgan to $219bn. While quarterly earnings leave many questions unanswered, the issue of a historic runaway increase in securities-based finance has been reconfirmed. "

and

"Reporting last month, Goldman Sachs, Lehman Brothers, Morgan Stanley, and Bear Stearns posted combined (fiscal) first quarter asset growth of an astounding $239bn, or 34% annualized, to surpass $3.0 TN."

and

"At this point, the more important dynamics remain the move by financial institutions into commercial lending and capital market activities. And as Citigroup’s asset growth of $137bn and JPMorgan’s $57bn demonstrate, institutions can grow securities market-related assets these days much more readily than they can traditional loans. Need earnings to please Wall Street and support the stock price – go capital markets!"

Same as above goes double (or whatever they lever up at!) for the hedge funds too.

And on balance all of this liquidity is aligned long and has been since the summer 06 lows, if not longer. Until this money stops expanding, comes out of our markets or reverses short - we go up and he'll keep blowing up his clients with his silly indicator. Worse, he could see the unwashed public masses come into the fray and really drive this higher.

So, how will this all end, probably badly at some point but where would that leave Cook? Well if some of you are correct about how long he's been calling for this 29% fall -- the Dow will have risen around what, 18%? - in that time - and that's if it crashed now. By the time he gets his crash, his call may have cost his followers the 29%! I may have exagerrated the math here -- but my point about why he's wrong I will stick by. So while I am VERY bearish on the US economy it is suicide not to recognize the impact of a credit bubble.

Quotes are from:

http://www.prudentbear.com/articles/show/1997
 
Quote from Trader5287:

Exactly. Mark Cook is a geek and a loser for the same reason I am in forecasting - he fails to understand that "something is fundamentally different this time".

I will borrow from the great bear weekly columnist, Doug Noland:

"During the first quarter, the Liability “Fed Funds and repos” jumped $44.4bn at Citigroup and $56.7bn at JPMorgan. Goldman, Lehman, Bear Stearns, and Morgan Stanley combined for a $100 billion increase in “Repo” Liabilities, a 77% annualized growth rate. It is worth noting that the first quarter increase in “fed funds and repo” from these six institutions alone ($201bn) was larger than total M2 growth ($160bn) during the period. Over the past year, the Liability “fed funds & repo” increased 41% at Citigroup to $393.7bn and 45% at JPMorgan to $219bn. While quarterly earnings leave many questions unanswered, the issue of a historic runaway increase in securities-based finance has been reconfirmed. "

and

"Reporting last month, Goldman Sachs, Lehman Brothers, Morgan Stanley, and Bear Stearns posted combined (fiscal) first quarter asset growth of an astounding $239bn, or 34% annualized, to surpass $3.0 TN."

and

"At this point, the more important dynamics remain the move by financial institutions into commercial lending and capital market activities. And as Citigroup’s asset growth of $137bn and JPMorgan’s $57bn demonstrate, institutions can grow securities market-related assets these days much more readily than they can traditional loans. Need earnings to please Wall Street and support the stock price – go capital markets!"

Same as above goes double (or whatever they lever up at!) for the hedge funds too.

And on balance all of this liquidity is aligned long and has been since the summer 06 lows, if not longer. Until this money stops expanding, comes out of our markets or reverses short - we go up and he'll keep blowing up his clients with his silly indicator. Worse, he could see the unwashed public masses come into the fray and really drive this higher.

So, how will this all end, probably badly at some point but where would that leave Cook? Well if some of you are correct about how long he's been calling for this 29% fall -- the Dow will have risen around what, 18%? - in that time - and that's if it crashed now. By the time he gets his crash, his call may have cost his followers the 29%! I may have exagerrated the math here -- but my point about why he's wrong I will stick by. So while I am VERY bearish on the US economy it is suicide not to recognize the impact of a credit bubble.

Quotes are from:

http://www.prudentbear.com/articles/show/1997
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He's "a geek and a loser," for his bad call, and you are actually taking the position that it is different this time. If that ain't the pot calling the kettle black, I don't know what is! Give me a break. It's never different this time, how long will it take for you to realize that.

As for his call, It's one trade that has gone bad, do some reseach on the guy and you'll learn that like all great traders, he has a multi-strategy approach to the market, and he allocates his capital and manages his risk according to an overall trading business plan. Money management is why he has remained in the game for so long, and will remain in the game.

As for his track record, his time in the business, and the numbers he has put up, speak for themselves. As for not showing his track record, why in this regulatory evironment would anyone open themselves up to that legal hastle? I wouldn't, and neither shoud he.

Cook has made a call that is likely early, but will likely be right, but anyone who has blindly followed his advice, and allocated all of their capital to this strategy, and lost their money, deserves what they get. IMO, Cook is one of the few that walks the walk, and he deserves some respect, especially from you hacks whose success is likely the result of a rising tide, rather then any true skill. Time will prove both Mr Cook, and myself right on this one.
 
Quote from mschey:

He's "a geek and a loser," for his bad call, and you are actually taking the position that it is different this time. If that ain't the pot calling the kettle black, I don't know what is! Give me a break. It's never different this time, how long will it take for you to realize that.

As for his call, It's one trade that has gone bad, do some reseach on the guy and you'll learn that like all great traders, he has a multi-strategy approach to the market, and he allocates his capital and manages his risk according to an overall trading business plan. Money management is why he has remained in the game for so long, and will remain in the game.

As for his track record, his time in the business, and the numbers he has put up, speak for themselves. As for not showing his track record, why in this regulatory evironment would anyone open themselves up to that legal hastle? I wouldn't, and neither shoud he.

Cook has made a call that is likely early, but will likely be right, but anyone who has blindly followed his advice, and allocated all of their capital to this strategy, and lost their money, deserves what they get. IMO, Cook is one of the few that walks the walk, and he deserves some respect, especially from you hacks whose success is likely the result of a rising tide, rather then any true skill. Time will prove both Mr Cook, and myself right on this one.
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I'd second this.

When I read posters talk about "how it's different this time," it is apparent that they haven't been around that long, at least in the trading arena.

After the bull ends, whenever that may be, they probably won't be around for too much longer.

I find Cook's views of the economy to be rather simplistic, but as a trader he's the real deal, and has been for a long time.
 
Quote from Allmighty1:

I admire Cook for his accomplishments. That said, I myself don't like to use the term "early" to describe trades or positions.

In my view using the term early allows the trader to decieve himself. Look at how MarketSurfer uses the term each time one of his trades bites the dirt. He is early EVERY time...he stays in way too long, take a bit drawdown (assuming he really trades) and then when he is knocked out, says that he will re-enter later. (With what, marbles or shiny pieces of glass)...I will tell you this, good professionals stay away from this type of thinking because it distorts reality.

This is reality. Unless you are right (net positive), you ARE wrong, and every tick and every dollar represents a real and tangible loss.

Nothing to do with you Mschey, just my take on how thinking affects trading performance.

As I said before I like Cook, but like all traders, he can be wrong.

A1
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I would interpret Cook's indicator as a heads up warning, but it would be imprudent to go short and expect to see 29% declines or more just because a great trader sees that in the cards.

I disagree with his particular interpretation, but I listen. He has earned his reputation through success and hard work, not by bluster and pretension.

Cook's indicator suggests that the balance between fear and greed is out of whack, that there is too much greed and too little fear. If the market does turn sour, it could be pretty nasty.

I would be careful about buying dips in this market, since a dip could easily turn into a rout. At one point in the future there will be be a lot of people who wished they had sold when the market was higher. If and when that happens, look out below.
 
Quote from smilingsynic:

I would interpret Cook's indicator as a heads up warning, but it would be imprudent to go short and expect to see 29% declines or more just because a great trader sees that in the cards.

I disagree with his particular interpretation, but I listen. He has earned his reputation through success and hard work, not by bluster and pretension.

Cook's indicator suggests that the balance between fear and greed is out of whack, that there is too much greed and too little fear. If the market does turn sour, it could be pretty nasty.

I would be careful about buying dips in this market, since a dip could easily turn into a rout. At one point in the future there will be be a lot of people who wished they had sold when the market was higher. If and when that happens, look out below.
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Yes, and pretty soon, the Sky will be Falling!
 
Quote from JimmyJam:

Yes, and pretty soon, the Sky will be Falling!
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Are you really that naive to think that the market will never drop again? I know you're new to this, but, come on already.:-)

As to when that will happen, I will leave that to someone else, for I have no idea.
 
Quote from smilingsynic:

Are you really that naive to think that the market will never drop again? I know you're new to this, but, come on already.:-)

As to when that will happen, I will leave that to someone else, for I have no idea.
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Yeah, I knew that.

Jimmy Jam
 
Quote from Trader5287:

Oh my, see I've touched a nerve.

I'll be sure to check back in a month and see how Mr. 29% Drop is doing.
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Oops - forgot to put down where we were when I wrote the above:

* This Week's Markets *
DJIA 12,961.98 350.34
Nasdaq 2,526.39 25.84
S&P 500 1,484.35 30.60
Rus 2000 828.86 7.74
DJTA 5,205.86 170.81
S&P 400 880.20 12.09
Nas 100 1,845.89 22.20
 
Mark may only of meant 19% correction!!

Update he's a jesus trader! his quote " if you don't give away 10% to the Lord God's audit will find you.... " Hummmm. One must make a " Love Offering " Give back to the lord & give twice..."

Ok so if Mark gave 10% away already, then perhaps he is only looking for a 19% correction and if he gave twice it's really only a 9% correction. So there you have it folks race out and give some money to charity! The more we give the less the market will fall.
 
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