Seeking Alpha

Eric Parnell, CFA

 
View as an RSS Feed
View Eric Parnell, CFA's Comments BY TICKER:
Latest  |  Highest rated
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello Ted,

    Thanks as always for your comment and your excellent points as always. I agreed with your recent comment about the risk-reward being heavily tilted to the downside at this stage (not worth trying to squeeze out the last +3% to the upside), and your point here is also very important about the leadership of defensive sectors at bull market peaks into the early stages of bear markets, as these are the areas that have traditionally provided positive returns for some time even as the broader market had fallen into a bear market. The same set up has been playing out recently, as high beta and momentum has been badly slammed in this latest pullback.

    Your point about investors getting unwittingly trapped in bear markets is also outstanding and something that I agree with completely. I see this as a particular risk in the current bull market given that investors have become so conditioned to buy every and all dips over the last six years. Unfortunately, this dip buying is exactly how investors suddenly find themselves down -20% to -30% before they realize that the bear market has been underway for some time and is set to continue for a while longer.

    Outstanding points as always. Thanks again.
    Oct 12 02:24 PM | Likes Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello Shoemouse,

    Thanks for your comment and great points as usual. One that particularly stands out for me is your point about pizza and stocks. It is one of the amazing things about stock investing, as they are among the rare few items that people demand less of when they are on sale at low prices and demand more of when they are marked up at high prices.

    From my perspective, I like sales far more than mark ups. I still remember that flight to Cleveland on March 12, 2003 when I had run and printed a individual stock screen for all of the names in the S&P 1500 at the time - there was so much value on the pages that I regretted not having nearly enough capital to buy up the hundreds of individual names that were on sale. I look forward to such a day again sometime in the future if it ever allowed to come to pass.

    Thanks again for your great comment.
    Oct 12 02:16 PM | 1 Like Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello Retired1,

    Thanks for your comment and great questions. My take is the following. If we do get a bounce, it may be fairly weak. And even if its strong enough to take us to new highs, they may very well be the final highs of the long running bull market. After that, I believe the onset of the next bear market is drawing close and could be upon us within the next few months if not sooner. How things play out in the coming week will be important in determining exactly when this transition finally takes place.

    Well done on the TZA position over the last three weeks, as it has been tremendously rewarding over this time period. Great call so far.

    Thanks again for your comment and great questions.
    Oct 12 02:10 PM | 1 Like Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello BBwetrust,

    Thanks for your comment. While my article suggests a probability tilt in favor of a bounce in the coming week (Monday in particular will be interesting given the light volume that typically comes with the Columbus Day holiday), the probabilities are generally balanced between such an outcome and the continuation of the move lower. My answer here sounds kind of wishy-washy, but the fact that we are at a major market crossroads with so many other things already happening is what makes the upcoming trading week so important in choosing the path for the weeks and months ahead. It will be interesting to see.

    Thanks again for your comment. I appreciate it.
    Oct 12 02:07 PM | 1 Like Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello jprizzuto,

    Thanks for your comment and for raising some good issues for discussion. Your point is well taken about the 'either/or' nature of recent articles. One of the things that I dislike about a market where short-term probabilities are more balanced between two outcomes is that it can cause my articles to come across like I am waffling, which is not my intent. Instead, it is more to express that things could go either way at the current juncture, but I can definitely see where it might come across otherwise.

    As for my intermediate-term outlook, I would narrow my range of predictions from what you described to the following. Either the market rallies from here and the bull market lasts a few months longer before ending (no happily ever after - instead a happy for a just little while longer before the fun comes to an end), or it breaks down from here and the bull market ends sooner rather than later (not an end of a world scenario by any means but instead a long overdue cleansing that finally allows the economy and markets to evolve to the beginning of the next secular bull market phase, which in my opinion is the better of the two outcomes of not prolonging the inevitable to get to a far greater future positive).

    In this regard, I think we are largely on the same page with the exception that I believe we are still in the midst of a secular bear market and that the coming bear market may last longer and go deeper in order to bring us to the start of the next secular bull market. It will be interesting to see how it all plays out.

    Thanks again for your comment. Great points!
    Oct 12 02:01 PM | 2 Likes Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello GeeZee,

    Thanks for your comment and I agree with your point here about the various other asset classes that have already broken down. I have actually covered these points in detail in a number of recent articles, so I opted to reduce my revisiting of this point to the first paragraph on the bearish side so as to avoid beating the point into the ground. But I agree with you point and appreciate your raising it. And to your point, even if the market does rally from here, it very well may be the final waning advances before this long running bull market finally gives over to the next bear.

    Excellent points and thanks again for raising them for emphasis.
    Oct 12 01:53 PM | Likes Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello duster,

    Thanks for your comment and you hit squarely on one of my many laments about the persistently easy monetary policy from the Fed over the last several years. By driving so many asset classes to premium valuations, they have created a far more unstable long-term investing environment and undermined the ability to effectively diversify through asset allocation while at the same time eliminating the ability for retirees and those living on a fixed income to secure a reasonable interest rate from FDIC insured savings instruments. Clearly, investors will likely have to work much harder and be much more nimble in the future than they might have had to be otherwise if the Fed had simply backed off in the summer of 2010 instead of diving back in for QE2, two Operation Twists and QE3. It should be an interesting rest of the decade in this regard.

    Thanks again.
    Oct 12 01:49 PM | 1 Like Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello tallguyz,

    Thanks for your comment and your kind words on my articles. I appreciate it!

    You raise a very good point about cash. Your timing in moving to cash has worked particularly well, which is great.

    I find that holding cash is often underrated and overlooked as an alternative for investors. Holding cash does not mean that one has to keep it there forever earning +0.05% interest. Instead, holding cash for the short-term or intermediate-term earning +0.05% is a far better alternative than suffering a -20% decline in value. Moreover, an allocation to cash within a broader asset allocation strategy can help neutralize overall portfolio volatility, which can be a plus particularly during periods of heightened uncertainty.

    Thanks again for your comment and for sharing your current thinking.
    Oct 12 01:45 PM | 1 Like Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello bartpr,

    Thanks as always for your comment. I agree with your point completely that a lot of technical damage exists underneath the market surface and across many correlated asset classes. Even if the market does rally from here, I suspect that we are approaching if not already in the final innings of the current bull market.

    Great points. Thanks again.
    Oct 12 01:41 PM | Likes Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Hello newbeach861,

    Thanks for your recent comments including here on this article and for raising some important points. I agree with you that probabilities are favoring a bounce at this point. Any further breakdown in stocks from here would be notable as a result.

    Great points. Thanks again.
    Oct 12 07:23 AM | 1 Like Like |Link to Comment
  • Stocks: The Most Important Week In 6 Years [View article]
    Thanks bbro. This is a very important point, as it is not just about the break of the 200-day moving average, for sometimes these breaks can be bullish buy signals and other times they can be bearish. Instead, it is more about the magnitude of the break, the frequency of future breaks, the overall slope of the 200-day moving average line and a number of other factors that must also be considered.

    http://seekingalpha.co...

    Thanks again bbro for raising an important point on the 200-day MA.
    Oct 12 07:22 AM | 5 Likes Like |Link to Comment
  • Finding The Bull Market Peak [View article]
    Hello SimpleData - Thanks for your reply. I appreciate it and great point. I completely agree. Thanks again!
    Oct 10 02:51 PM | Likes Like |Link to Comment
  • Finding The Bull Market Peak [View article]
    Hello SimpleData,

    I'm not sure if you were referencing my article as a "bear article", but your comment actually makes my point about this section of the article. For those that perceive the current pullback to be a correction, it is important to keep the fact that we have fallen so little and are only a few trading days away from new all time highs in mind. We would have much further to move to the downside before this could truly be considered anything approaching a meaningful correction.

    Thanks again, as I agree with your point.
    Oct 10 12:52 PM | 1 Like Like |Link to Comment
  • Finding The Bull Market Peak [View article]
    Hello Alan,

    Thanks as always for your comments on my recent articles (I was meaning to reply to comments yesterday on my last article and I appreciated your input as always). You make excellent points here as usual and I agree with you completely on the expected duration and magnitude of the next bear market. It could be death by a thousand mini corrections over several years before it's all said and done.

    Thanks again.
    Oct 10 12:50 PM | 1 Like Like |Link to Comment
  • Finding The Bull Market Peak [View article]
    Hello ant21b,

    Thanks for your comment and for introducing these three key points. I will take a look at these measures at your recommendation. Thanks again!
    Oct 10 12:49 PM | Likes Like |Link to Comment
COMMENTS STATS
2,318 Comments
2,465 Likes