Time to Avoid the Stock Markets Altogether

Excerpts from Dr. Enzio von Pfeil's August 21, 2008, appearance on CNBC Asia:

1. Asian stocks started the week in positive territory - have markets bottomed out? Where do they go from here to year end?
   
   • With it now received wisdom that the Economic Time™ is worsening globally, there is NO way that profits can improve: the excess supply of goods is pressuring turnover and margins.
   • Thus, look for the next downleg, probably around October.
2. Stocks are at their cheapest valuations in more than a decade - are investors biting and is interest coming back to the market?
   • This is a valuation rally driven by smart traders.
   • Us fundamental guys who work on strategies and cycles are not joining this frenetic party.
   • Any blow up in Georgia will send everything reeling south.
3. Commodity prices are easing – how much will that impact corporate earnings going forward?
   • It won’t, because corporations will have to lower their prices in order to keep market share.
   • Besides, I am not so convinced that commodity prices per se are easing.
   • Instead, you have seen a huge re-allocation of asset classes. The dollar gets bought, so up go stock markets and down go commodities.
   • However, China and India have not gone away, nor has El Nino or La Nina (agricultural prices), nor have oil fights (Muddle East and the next Cold War).
4. Where do you see values sector and market wise?
   • This not the time to be clever.
   • Because of the horrible global Economic Time™, I would avoid stock markets.
   • Indeed, we have shorts on the American market, and particularly on the financial sector.
5. Are there any other topics you'd like discussed?
   • Recent events in Georgia imply a re-surgence of the cold war. That has HUGE investment implications, which I am happy to discuss.
   • Also, now that the Fed is bailing out individual banks, watch its independence wilt, dragging the dollar down further.

Comments

[Frankfurt/D...:]

Just right article at the right time!!!
Sold 10 mini-Dow at 11390.
I have no respect for most of SA honchos,but your comments I appreciate as they have to do a lot with trade not with painting charts.
THANK YOU!

2008 Aug 20 06:34 AM

[neeb??:]

Fed had independence? When?

2008 Aug 20 08:48 AM

[a. palmer jr.:]

Just as soon as I would sell any stocks or mutuals the market would take a huge upturn, Just like it takes a huge downturn when I buy them.

2008 Aug 20 09:02 AM

[notsosmart:]

its all manipulation.wall st is vegas now.you lose slower & nobody brings you a drink.dont believe anybody re anything. they all have an agenda(their hand in your pocket).think for yourself.

2008 Aug 20 10:30 AM

[CLH:]

It never pays to try and time the market.

2008 Aug 20 12:32 PM

[notsosmart:]

a.palmerjr.-just try the opposite of what you have been doing.

2008 Aug 20 12:43 PM

[daytrader:]

at least the fed was alot more independent under alan greenspan.uncle ben is going to keep bailing out these companies because they're all in bed together.with what is going on in the world today,who would go long?then again,who knows?

2008 Aug 20 01:04 PM

[daytrader:]

at least the fed was more independent under alan greenspan.uncle ben is going to keep bailing out these companies because they're all in bed together.with what is going on in this world today,who would ever go long on stocks?then again,who knows?

2008 Aug 20 01:08 PM

[Strongr:]

I wish I had pulled completely out in the spring like I had thought about. Holding a lot of oil stocks, I will wait it out. Market direction? Flip a coin. After December.

2008 Aug 20 02:06 PM

[mouse:]

It helps to know what you're doing if you want to try and time the market--I went to 100% cash last July on the day the DOW closed at 14,002. It was close enough for me to being a seven year double top. The last seven year double top was 1965-1972, which led to a very bad bear market which bottomed in 1974, and didn't reach new highs until 1982. I don't think we're any where near a bottom yet.

2008 Aug 20 04:53 PM

[Steven Hansen:]

the markets have no direction because there is a significant amount of information which is unknown especially on debt. gambling is done in casinos. whoever calls the bottom is only lucky.

2008 Aug 20 08:27 PM

[opt:]

CUT THE BULL!

TRADING is GAMBLING... the only difference between the casino and the stock market is that there is no mathematical sure loss over time in the market as it is in the casino. But whether you are a "long term investor" or day trader... you ARE taking big risks and you ARE gambling... do not kid yourself otherwise.

2008 Aug 20 09:21 PM

[Old Trader:]

opt,

Mom...is that you?

old trader

2008 Aug 20 11:57 PM

[Steven Hansen:]

the market is currently powered by momentum traders. the buy and hold boys have eaten a lot of earth.

seekingalpha.com/artic...

if it is true the market pre-prices itself for known events, and the next several quarters looks terrible - then there is little reason for an upturn now. this is time for the momentum boys to play - driving stocks up and down. there are no fundamentals in play for a real upturn.

2008 Aug 21 02:56 AM

[xsuddensam:]

An independant Fed? You gotta be kidding. The Fed is in the pocket of the banking industry. It was created by and for the bankers.

2008 Aug 21 06:17 AM

[REBEL:]

It sure is ironic that a battle on the Eastern Front, (e.g. the Russia - Georgia conflict), is the site for a wake-up call to the world. The similarities between the worldwide economic situation that led to World War II and the worldwide economic situation in August 2008 are frightening. A "cold winter" in Europe as the Russians cut Europe's energy pipeline signals the launch a brutal global economic meltdown.

2008 Aug 21 05:29 PM

[Did U Think...:]

Avoid my A$$!!! Long SKF, FXP, SRS, short AIG. Soon to be short home builders again.

If I had to be long anything it would be solar and gold stocks.

2008 Aug 22 02:35 AM

[Owen:]

"This [is] not the time to be clever." -- what does that mean? Only idiots will do well in this market? I guess only idiots will follow this type of advice anyway. The rest of us will insist on using their head for investing, despite von Pfeil's recommendation to the contrary.

2008 Aug 22 05:47 AM