Gurus Say a Bottom Is in: Do We Listen?

Wouldn’t be wonderful if all we had to do was listen to the professional gurus and then know what we need to do in order to make money? I wish I could just listen to the experts and make money.

What I find interesting is the overall Bullish tone that many gurus have.

Mark Faber from Mark Faber LTD as well as of the Doom & Gloom report believes the current rally might have more legs. His point is that all of the money that the world's central banks are printing is reinflating the financial markets.

Mark Mobius from Templeton Asset Management believes we are at the beginning of a bull market rally.

Baron Biggs sees a 30-50% rally which depends on the numbers from the real economy around the world…He also thinks it is premature to call a beginning to the next bull market.

Jeffrey Saut from Raymond James believes if the credit spreads narrow a bottom can be in place.

Dennis Gartman from the Gartman letter states he would err to the side of a being bullish due to the rise of some metals, shipping and grain producers.

Fritz Meyer from Invesco Aim advisors believes all that has transpired is a recap of some of the damage of Geithner’s Feb waterfall, almost tongue in check states that there are exceptional oppurtunities and we are back to square 1 ( Hearing that, I would have no idea which direction he is alluding to).

Erik Ogard from Russell Investments believes the market is bouncing off the bottom as the dislocation has been so large.

It is fascinating to me that so many market participants want to be told exactly what to do. I can’t help but believe it is much more prudent not to have an opinion, if the market wants to go up… Great I will buy it… or vice versa ..if the market wants to go down.. Great I will sell it… Albeit if I can put on a low risk trade.

Trading or investing in this fashion is called Trend Following. This is a proven historical fact that Trend Following is one of the more prudent ways to invest. Trend Followers cut losses quickly. How many mutual fund managers did that this year…or last… Granted trend followers will have draw downs, but they will not catch the proverbial falling knife. Moreover, they don’t predict, they react.

How many of you remember all the previous gurus? You are a guru until your prediction is wrong.

Comments

[cynewulf:]

Too many bulls make too much BULL.....

Mar 25 10:49 AM

[silver-bug:]

I believe there will be a short 1 year rally (2009-2010) up to DOW 10K-14K before that false bubble pops and we go on a nose-dive again. All that money pumped into the economy has to go somewhere.

Mar 25 11:18 AM

[William Cowie:]

If the market still has some down to go, I don't believe it will be that far, so I'm fully invested. Now I have time to read Seeking Alpha, instead of researching which stocks to buy :)

Mar 25 12:22 PM

[Mad Hedge F...:]

Watch out for the next black swan. Now that traders are partying again on Wall Street, we have to ask, what will take the punch bowl away? The unemployment rate shooting over 10%, which could happen in April or May, would be my first pick. Losses on option ARM loans could accelerate, taking out a few dozen more regional banks, WAMU style. Another, until now apparently healthy corner of the financial market taking huge undisclosed positions in securities we’ve never heard of, could suddenly blow up. A giant hedge fund could close at any time, freezing existing investors in place, and dumping gigantic positions on the market. Defaults on some big, high profile commercial real estate projects could also pull the rug out from under the market. Given the magnitude of the move up over the past two weeks, we might even see a short seller bite the dust. And of course, if any of the administration’s $3 trillion in bailouts/ reliquifying/stimulus hit a wall that would trigger a sell signal. Party on ebullient traders, but do so close to the exit.

Mar 25 01:39 PM

[Larry House:]

To the preceeding comment, it appears some of the bailout plan has hit a wall today with a poor bond auction. Can our government really think they are going to sell trillions and trillions of dollars of debt when there is risk of, if not outright default, the very real risk of those future dollars being much diluted by inflation? The comments today of the EU president are right on--the US is spending its way to hell.

Mar 25 03:18 PM

[Andy Abraham:]

Larry House's comment is wonderful... Can the govt really believe they can sell all this debt...without leading to inflation...todays statement from the EU is more than true... the only issue is possibly the US dollar is the best of the worst...

Mar 25 03:49 PM

[wise:]

the writer takes notes as he watches business TV

Mar 25 11:06 PM

[Fred Voetsch:]

You didn't say much but did speak the truth. We need to think for oursleves and use DATA (fasts) when making investing decisions.

Mar 26 01:56 PM

[ozcutty2:]

Only way out of this mess is to reflate. This will boost stocks massively. Wanna be in a deposit account earning 2-3% when inflation is roaring?
When people on maintstream catch on and pile back in the rally will have real legs. My favourite stock right now is AB, its like having leverage to any rally without taking out a loan!

Mar 26 09:23 PM