Constant 'Bottoming Process' Calls Are Meaningless

If everyone calls a bottom, does it matter? Here are some recent calls:

Reuters had this article that carried the following:

Bill Miller said that all long-term investors believe that stocks today are cheap, but credit markets must regain health before equity markets can rally. It "looks as if the bottom has been made" in U.S. stocks, said Miller, who runs Legg Mason's $7.6 billion Value Trust fund.

We are in a bottoming process in the markets, but that doesn't mean we are now entering a bull-market phase," said Brian Gendreau, an investment strategist in New York for ING Investment Management Americas. "Things take time to work itself out."

All year, people have been so pessimistic that any kind of bad news and the market just goes down," said Chris Orndorff, who helps oversee $50 billion at Payden & Rygel Investment Management in Los Angeles. "But when the market shrugs off bad news just as it did, investors are signaling that the worst is behind us.

On CNBC Monday morning Blackrock's (BLK) Bob Doll called what is happening a "bottoming process". Pick any other video recently on CNBC talking about stocks and you'll hear the same thing.

Here is a Google (GOOG) search for "bottoming process" so you can find the other 26,000 plus articles on it.

So, what to think? Nothing actually. If you watch the clips or read the quotes, this is the essential translation. "The market should go up, but it might fall more from here too, but the long term trend is up".

Basically they are not telling us anything. Do not start buying stocks in this market because of these calls. Buy individual or sell issues based on their specific pros or cons and your time frame.

You could argue that at any level the market is in the act of a "bottoming process". If the long term trend is positive, then by default all levels before higher ones must be a "bottoming process", right? "Bottoming Process" means nothing...

Comments

[drevno:]

Analysts, gurus, fund managers, commentators: what do they have in common? One thing: they are all people, people trying to make a buck. Eventually.

I completely agree that all the calls are meaningless now. They are nothing more than throwing darts at the board called the market. Sure, some will hit the bulls eye. Or the bear's...

Fund managers have not, as a whole group, lost any less than the individual investor. Analysts are downright dangerous, as there is no guaranty of their impartiality or actual savvy or insight extraordinare, and as a group, they differ wildly on their valuations and/r redictions.

Take your pick. Or take up darts...

2008 Dec 11 08:06 AM

[bored2tears:]

After hearing one CNBC anchorbunny after another (particularly the screeching Maria Bartiromo) ask guests if "this is the bottom" for the 10,000th time, I finally stopped watching the network for good. That was in January. It's been a good year ...

2008 Dec 11 08:10 AM

[investor88:]

Agree calls for bottom are meaningless now. Better to adopt short term trades with stop loss/sell stop.

2008 Dec 11 08:17 AM

[tdillian:]

"I finally stopped wathcing the network for good"

I am at that same point now..

these idiots didn't see all this crap comning.. now all of a sudden I am supposed to believe them when they tell me they think its "bottoming out"??

nothing but a bunch of overpaid idiots with a bully pulpit!

2008 Dec 11 08:23 AM

[Asbytec:]

I have to admit, I've (we've) heard bottom calls for some time. So far, no one has nailed it. Not even me...but I think the bottom....er, see? There I go again.

We've got a lot ahead of us and one thing is certain, I believe...volatility.

2008 Dec 11 08:39 AM

[Boubou:]

No forecaster, professional or otherwise, does any better than a coin toss in the long run. If this were possible, then the game would have to come to an end as all the money went into his predictions.
Every trade involves two parties, each of which takes the opposite view of the future. The wisdom cancels out .
In fact the whole profession is a sham which depends on the gullibility of such as us.

2008 Dec 11 09:16 AM

[Stock Trade...:]

I have to agree. All of the analysts and commentators calling a bottom are doing so with the "hope" of being right. just think of the publicity they will get if they are the one who called it right. On CNBC you keep hearing about the "Art Hogan bottom". Nothing against Mr. Hogan, but anyone on TV who called the bottom that day would be famous as well.
If there was a way to call the bottom with accuracy, more than one person would know how to do it by now.

2008 Dec 11 09:20 AM

[mcadoo3312:]

Agreed with everyone else. I am starting to think Becky Quick is one of the "better" anchorbunnies.

2008 Dec 11 10:25 AM

[joes:]

The idea of a picking a bottom is pointless, the question is always are stocks cheap. That is easier to understand as cheap involves current yield and potential to increase in value.

From an index perspective it is clear that the absolute price of stocks are lower than they have been in some time. Earnings will tell the tale next year, PE is back in vogue for the near term, so buy stocks that sell things at a profit, you don't need a prophet to figure that out.

2008 Dec 11 11:27 AM

[gordon:]

Hey all, when I heard Bill Miller's call, it had to be the scam of 2008!
Let's all look at this "esteemed guru's" record! here it is>
www.gurufocus.com/Stoc...

2008 Dec 11 12:26 PM

[Mr. Wynn:]

I now watch CNBC purely for the beauty pageant aspect of it. Which anchor bunny is the hottest, that kind of thing. I like the serious Julia Boorstin one day but switch to the generous-mouthed and humorous Melissa Francis the next depending upon my mood. When in need of an exotic fantasy it is, of course Melissa Lee. But, suddenly, Trish Regan's dark-haired good-looks will dominate my senses (I fantasize her and me at Columbia taking our MBA's together; would she marry me? mmmm, no).

But vying for top spot, always lurking in the background, are Erin Burnette and Michelle Caruso-Cabrera. No matter how many other hot CNBC anchorbabes I see - Diane Olick and Becky Quick flash across the mind's eye - Erin and Michelle keep swimming back into focus, waving to me like scuba divers in a huge hotel aquarium. Hi, Mr. Wynn!

Hi, Erin. Hi, Michelle. Either of your to girls free for dinner?


On Dec 11 10:25 AM mcadoo3312 wrote:

> Agreed with everyone else. I am starting to think Becky Quick is
> one of the "better" anchorbunnies.

2008 Dec 11 12:48 PM

[SW Richmond:]

Is CNBC America's longest-running Wall Street Infomercial?

2008 Dec 11 02:41 PM

[Jim Hawthorne:]

Attempting to call any bottom at any time is extremely hazardous to one's financial health.
At least there seems to be growing recognition that bottoming is indeed a PROCESS rather than a singular EVENT.
How do we know when we're in a bottoming process? We don't, until it becomes obvious in the rear-view mirror, and the market refuses to make new lows, the 25 and 50 day MA's flatten and turn upwards, and we begin the steady healing that only higher highs and higher lows with good volume can bring.
In the meantime, nibbles are better than big bites and nimble flexibility in very disciplined trading is the order of the day.
Ignore the talking heads.

2008 Dec 11 06:09 PM

[Did U Think...:]

That was a rational post if not a bit light on content. But you also kept it short. In truth the market is not bottoming in the bigger picture of things. This will take 3 years to occur and the dow will be down another 50% or more from here. It only stands to reason that the biggest credit bubble in history can only be followed by the biggest crash in history.

2008 Dec 11 07:51 PM

[happysoul77777:]

The market has changed. The SEC changed a few trading rules such as the repeal of the uptick rule. The FASB accountants changed the rule with FAS 157 in November 2007. Bottom calling is an exercise in futility because of these changes.

2008 Dec 11 10:06 PM

[Homer II:]

On Dec 11 12:48 PM Mr. Wynn wrote:

> I now watch CNBC purely for the beauty pageant aspect of it. Which
> anchor bunny is the hottest, that kind of thing. I like the serious
> Julia Boorstin one day but switch to the generous-mouthed and humorous
> Melissa Francis the next depending upon my mood. When in need of
> an exotic fantasy it is, of course Melissa Lee. But, suddenly, Trish
> Regan's dark-haired good-looks will dominate my senses (I fantasize
> her and me at Columbia taking our MBA's together; would she marry
> me? mmmm, no).
>
> But vying for top spot, always lurking in the background, are Erin
> Burnette and Michelle Caruso-Cabrera. No matter how many other hot
> CNBC anchorbabes I see - Diane Olick and Becky Quick flash across
> the mind's eye - Erin and Michelle keep swimming back into focus,
> waving to me like scuba divers in a huge hotel aquarium. Hi, Mr.
> Wynn!
>
> Hi, Erin. Hi, Michelle. Either of your to girls free for dinner?
>
>


What does this trash have to do with the O/P's calling the bottom??

2008 Dec 11 11:45 PM

[Big-P:]

Blah, Blah, Blah...for pete's sake let's make some money. Isn't that the idea?

How about this. Check my calls and you'll quickly see that it IS possible to time the market--or move it yourself...

Anyway, my advice to you boys--If you don't know how to short the market, stand out of my way until 12-16.

BTW...THEY are going to hit the markets especially hard on Sunday 12-14 so don't go home LONG over the weekend.

2008 Dec 12 01:20 AM

[PhinT:]

Well I do not follow you but I am banking on the financials to drop on monday and tuesday as well from one prick to another


On Dec 11 11:45 PM Homer II wrote:

>
> On Dec 11 12:48 PM Mr. Wynn wrote:

2008 Dec 13 11:25 AM

[Kunst:]

Well, at least he watches that stuff. I have no idea who these people he's talking about are. But I think his fantasy is cute. You, on the other hand, sound like a prig, no fun at all.


On Dec 11 11:45 PM homer II wrote:

>
> On Dec 11 12:48 PM Mr. Wynn wrote:

2008 Dec 14 01:40 AM

[User 184860:]

If Regan puts on more weight with her sharp features--Hellooo Ms.Piggy.
I agrre with the rest of your picks..

On Dec 11 12:48 PM Mr. Wynn wrote:

> I now watch CNBC purely for the beauty pageant aspect of it. Which
> anchor bunny is the hottest, that kind of thing. I like the serious
> Julia Boorstin one day but switch to the generous-mouthed and humorous
> Melissa Francis the next depending upon my mood. When in need of
> an exotic fantasy it is, of course Melissa Lee. But, suddenly, Trish
> Regan's dark-haired good-looks will dominate my senses (I fantasize
> her and me at Columbia taking our MBA's together; would she marry
> me? mmmm, no).
>
> But vying for top spot, always lurking in the background, are Erin
> Burnette and Michelle Caruso-Cabrera. No matter how many other hot
> CNBC anchorbabes I see - Diane Olick and Becky Quick flash across
> the mind's eye - Erin and Michelle keep swimming back into focus,
> waving to me like scuba divers in a huge hotel aquarium. Hi, Mr.
> Wynn!
>
> Hi, Erin. Hi, Michelle. Either of your to girls free for dinner?
>

2008 Dec 31 04:01 PM