Archman Investor

Global Markets in Review: Share Prices Too Far Ahead of Economic Reality

<<Ah the hubris of the Archman....750 remember the prediction..>>
<<Archman,,,you seem to believe in mean reversion when it only
meets your preordained agenda...>>

bbro:
i give no time frame for the 750. Could be next week or next year. The FED is pumping the system and market, mortgaging away the next 3 generations worth of wealth. You cannot fight that. However, that is the "only" thing holding the market up and this so called "recovery".
I don't know what is right or wrong. All i know is that my portfolio is at 2009 levels while the average American's portfolio is at 1999 levels or completely wiped out.
Some people know how to invest, others don't.
I just try and get people to think and stop falling for the lies of Wall Street and the financial media.

Global Markets in Review: Share Prices Too Far Ahead of Economic Reality

Blah Blah Blah.
Anyone who is not a 9 to 5 lifer knows that "profits" are not the real story to a successful business. EPS, and profits are nothing more than manipulated numbers that can be massaged as necessary to "make things work" Just as GE. They have been doing it for decades.
Revenue, and the growth of revenue, is the main number that should be looked at as a first step in accessing a business. If you are making more money, your revenue is rising. You are making less, revenue is falling. Simple as that. 85% of Wall Street earnings showed flat or declining revenues these past quarters.
To put it more simply: That sucks and there is no way to rationalize it.
I could care less about some NIPA corporate profits after tax numbers. The tax code "is" set up for businesses to essentially write down the value of everything so they can show a profit and keep more money legally. That is why 9 to 5 lifers never get ahead. They get their fully taxed paycheck and then have to pay for all their regular expenses with after tax monies, leaving them nothing.

S&P will revert to its 25 year continuation uptrend of 750. Always has reverted to that trend line and always will in the future. The question is which average American suckers will be caught holding the bag by buying into the market "after" it has run up 70% from the lows.


On Nov 22 11:16 AM bbro wrote:

> You miss one on the most important numbers...on Tuesday we
> get NIPA corporate profits after tax numbers....the average ratio
> over the last
> 25 years ( Taking out the extreme over valuation of 1997-2001) is
> 1.20.
> If we get a corporate profits after tax number of 1050. The ratio
> will be
> 1.04.......fair value for the S&amp;P 500 would be 1260.....In fact
> buying when Ratio is below 1.00 has always yielded good profits....

New Bullish Signals Emerge

Chris:

The bottom line is this:

You buy stocks when nobody wants them and when everybody wants them you say:
"Here, take mine."

Average mom and pop Americans are going to get destroyed when this market corrects.

The comments, articles and their links you provided were from 2008, when I was talking about 2009.

Here is your article from March 2009:
seekingalpha.com/artic...
April 1, 2009
seekingalpha.com/artic...
April 8, 2009
seekingalpha.com/artic...

When fear was the greatest you yourself were not recommending stocks. Now that the market is up 45% from then low, you are now bullish as all get out.

This is why the asset gathering business is flawed. As a professional in this field you should have been buying when other were selling, buying when the likes of CNBC were finally telling people to sell at S & P 680 after they kept telling people to buy the entire way down. Now I understand that your clients may vary in age, investment tolerance, etc, however for those under 50 who need a retirement that does not include working at Wal-Mart, I would think people should have been buying stocks (maybe not hand over fist) under S & P 700.

The following from my above post are 100% true:
<<Almost 95% of companies earnings were from asset sales, layoffs, and every other cost cutting measure under the sun. Revenue at most companies was down 30% YOY.
Unemployment continues to go up.
The dollar continues to get destroyed.
Debts are still being defaulted on at an alarming rate>>

Yes, these markets are going higher simply because there are those who want the market to go higher.
However, when the time comes that those "powers that be" decide that the markets are to go lower, then those average americans getting in now are going to once again get their heads handed to them.

Chris, I am not in the investment business nor would I ever claim to be smarter than anyone around here, especially those who do this for a living. However I always ask myself, as a non professional manager of my own money, why is it that as of today the value of my self managed portfolio of stocks is about where it was back in early 2008, while the average Americans is at 1999 levels? Probably because I learned long ago, when to buy, when to sell, what to buy, and the "real" secret of investing:
The goal is to create "consistent", "sustainable", long term wealth creation over time.
Not chase performance or listen to those on TV or in print, who have no vested interest in my future regardless of how they appear to act.

Thursday Outlook: Commodities, Global Markets

One thing I notice on a lot of the charts:
The MACD is topping out and in some cases "almost" looks like they want to rollover. I know they can trend sideways for awhile but I think it merits watching.
Though I use both fundamental and technical analysis when it comes to stocks in my portfolio, the technical analysis, is vital for perhaps getting ahead of a stock's major move. You have to feel for the average person on the street who has no idea, none, how their stocks move as they sit there wondering how all the gains they made suddenly vanish.

compdivplan.com

Wednesday Outlook: Commodities, Global Markets

Bull run:
Here is my scenario of dollar:
If most economies (ex USA) recover: Dollar down
If all economies recover: Dollar down
If USA only recovers(not likely): Dollar up slightly
If all economies stay in the toilet: Dollar up

I guess you have to be watching every possible scenario.

Wednesday Outlook: Commodities, Global Markets

I am just sticking to the same formula that has made money for the past decade and a half. Never to bullish, never to bearish, and keep enough on the sidelines to take advantage of opportunities.

compdivplan.com

Tuesday Outlook: Commodities, Global Markets

It is just another line in the ongoing plot line of Wall Street.
The real players always know the outcome, while mom and pop americans are left wondering why they couldnt figure out the real story. The playing field has never been this UN-level before in the history of the stock market.

compdivplan.com

Tuesday Outlook: Commodities, Global Markets

<<As I have maintained for some time, what most bothers me about CNBC in USA (Europe and Asia CNBC have useful interviews often) is not only their chronic cheerleading, but their being loudest when we should be most cautious. They only time they're not bullish, is when you should be (e.g., near bottoms in 2002 and 2009).>>

As I have said many times:
CNBC will tell you what you want to hear, help you protect your money............AFTER the market falls 40% and after they yell buy buy buy all the way down from DOW 14K 13K 12K 11K 10K 9K 8K, etc.

It's called zero accountability, and no integrity.

If It Looks Like a Bull, Walks Like a Bull, Acts Like a Bull…

Conceptwizard:
Agreed. I attempted to show this in my post, with the accompanying chart I provided.
As per my post and my chart from that post I see the market in a very big ascending triangle pattern. Now that sort of pattern is typical bullish and reflects a long term uptrend line on the bottom and a series of tops along the way, until (hopefully) it is resolved to the upside.
I had at one point extrapolated out into the 2000's where the meeting point on the chart was.
You know what year it gets resolved? Somewhere after the year 2030. Look I have no idea what happens. But it would be interesting and prove my thesis if over the next 20 years, stocks tested but never got above 1400 on the S & P and then always fell back to its long term trend line. That would confirm to me that we are in this ascending triangle and it will not be resolved for another 20 years. Fun food for thought.

If It Looks Like a Bull, Walks Like a Bull, Acts Like a Bull…

Where do we start with this one?
Well, first of all the author owns and runs a money management firm.

Gee I wonder if it is in his best interest to be bearish on the markets considering he is long certain markets? I think not. I am not attempting to be critical and I do not want that author to be offended, however he is an "asset gatherer" and they rely on asset gathering and the fees generated from such practices. Bull markets tend to me more kind to asset gathers than bear markets so you see very few asset gathers promoting bear markets.

Secondly his charts on the S & P are taken in small snap shot times frames which do not illustrate the real overall market trends of those time eras.
The 1995-2000 timeframe he illustrates was the final 5 year explosion of easy Fed money within a 20 year secular bull market that started in 1982.
If you look at this chart from an article I wrote a few weeks ago:

static.seekingalpha.co...

You can easily see the "melt up" final phase of the 1982-2000 bull market. This is the time frame the author displays in his chart.
That was not "what a bull market looks like" as the author stated but what a bubble looks like. The authors chart allowed for the flattening out of the time frame but when showed from a true 25 year perspective it is very easy to see the bubble.

Secondly, while the authors 2000-2003 bear market is correct, upon review of the chart I attached, it is quite clear that the bubble number 2 was inflated after 9/11 and though we had a big bear market rally from 2003-2007, thats all it was: a bear market rally fueled by easy money, housing ATM, etc.

So the crash occurred and the S & P got back to its continuation trend line- which I do think was a good thing!!

However now, are we really in a "new" bull market???

To me, a bull market is defined by stock prices reflecting the "true" and "real" and "sustainable" underlying fundamentals, nothing of which I have yet to see from any of the data that has come out.

That is not to say the market cannot anticipate the future, however I think the market has anticipated quite a bit, plus investment banks using TARP money, hedge funds driving the market higher simply because they want it to go higher, certainly has not hurt either.

I have enjoyed this market uptrend (lets not call it bear market rally or new bull market for now- lets just leave it in generic terms) however I remain skeptical of it all.

People do have a few choices. Most americans however follow the carnival barkers on TV and typically get their heads handed to them. Or they can be smart and do like I do. Never be to bullish, never be to bearish, for being one or the other, will certainly send you to the poor house unless you have perfect timing.

Thursday Outlook: Commodities, Global Markets

Can I ask a question?

What sort of low life, white trash scum, would give negative comments (thumbs down) to those like myself and others, who are wishing Dave and his wife only the very best during times of distress?

Screw you, you pathetic people. Go back in your holes where you belong. If it were not for the internet, you would live your useless lives out and be gone from this earth, and no one would ever care anyway.

Thursday Outlook: Commodities, Global Markets

Dave:
I typically read your end of day update directly at EFT Digest around 7:00 PM EST, and yesterday was no exception.
After reading the first paragraphs last night, I had to take a step back, before reading your charts, and offer you and your wife as many silent prayers as I could for her speedy recovery. I hope you both keep your spirits up, and know that there are many, many, people out there wishing the best for you and your wife.
Thank you again for all you do, and I wish you both the best.

Tuesday Outlook: Commodities, Global Markets

Here is a repost of a comment I left on another thread. The comment I feel applies to many articles we see on the internet.

As always Dave, great job analyzing the current market. I never miss an EFT Digest recap.

I wrote elsewhere:

At DOW 14,000 the pros say:
"Keep on buying"
"Buy for the long term"
"Buy and hold"
"Everything is great"
"Goldilocks economy"
"Never been stronger"

At DOW 6500 the pros say:
"Buy and hold is dead"
"Give your money to the pros and let them trade the market for that is the only way to make money now"
"Time to take money off the table"
"It is the end of the world"
"Cut your stock exposure by 50%"

However, at DOW 6500, the pros, the institutions, the hedge funds are buying hand over fist while mom and pop are shell shocked and on the side lines.

Now, 35% to the upside later, mom and pop are getting back in, the pros are putting their "super strong buys" on everything, and apparently, everything is right with the world again.

No wonder the average American's portfolio, as of today, is back where it was in 1999.

Goldman ups the coal sector to super strong buy AFTER it has a 200% move up.

Yeah. Ok.

Wall street tells you what you want to hear, I tell you what you need to hear.

Thursday Outlook: Commodities, Global Markets

Dave:
As always, very insightful, comical, and honest......refreshing.
I never miss one of your recaps, ever.
I hope the health crisis is resolved for the better.

As a note, I always ask myself,
"Self, what is it going to take to get these lying pump monkeys, like Art Hogan, who have been 100% dead wrong, called no less than 8 market bottoms down from DOW 14K, of the air for good"??

I guess there are just way to many people out there who truly believe (or are led to believe) that people like Hogan are smarter than them. When in fact, Hogan is just an over paid salesman who probably does not have to work another day in his life if he chooses not to.

Friday Outlook: Commodities, Global Markets

I wish to express my condolences for the loss of your friend Greg Newton. His insight, and wit will be missed.

I agree with the above poster.

We have a market that has been going up because hedge funds, unlike 25 years ago, now truly run the market. They want to make money, so the market runs.

I notice most of the time, when people leave negative comments about my statement above, it is because these people are the ones who are down 75% in their portfolio and "need" stocks to go up to validate their awful investing abilities. They are looking for any rationalization and excuse as to why stocks have to advance.

This rally has been 50% short covering, 40% hedge funds moving it up, 9% PPT, and 1% mom and pop, average americans.

From the hundreds of posts I read a day, all over the internet, mom and pop americans are still on the sidelines, scared and not trusting anyone. The shame of it is, they eventually get in "after" the market goes up 30% and after then finally let CNBC inside their heads convincing them everything is ok now.

The 25 year continuation trend line on the S & P 500, puts the index at 750 as of today. Anything within 50 points either direction could be considered safe to invest. Once you move away from that level, you are either buying at an even better time, or you are overpaying. They way things are going, you would think the DOW is going to be back at 14K by years end...LOL.

I continue to be 90% long in my portfolio (1/2 canadian stock, 1/2 US stocks). Just expressing this to make clear to those who might think I am to negative or short the market.

I finally have been able to pick up shares in a few dirt cheap utility stocks, but for the most part remain invested in stocks that most americans are not told to buy by the forces that want them only in the likes of GE/MSFT/BAC, etc.