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Eric Parnell, CFA

 
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  • The Latest Game Changer For Stocks [View article]
    Hi KenGold - Thanks for your reply. And I agree completely - both interesting and disturbing! Thanks again.
    Jan 25, 2013. 10:06 PM | Likes Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello Robert,

    Thanks for your comment and for raising a number of important points.

    In regards to central bankers, I agree with your sentiments here. One point that I think is important to express is that I have great respect for Ben Bernanke. I could not imagine a more difficult time to be Chairman of the Federal Reserve, and I honestly think that he is acting in what he believes is the best interests of the US and global economy and its markets. And while I fully agreed with his implementation of QE1, I have been strongly against the decision to go ahead with everything since including QE2, Operation Twist and QE3. To this point, I certainly have not or would not advocate allowing everything to melt down, for once an economy becomes locked in a destructive downward spiral it is very difficult to pull it out. But once we had pulled back from the brink in the summer of 2010, the opportunity existed at that point to allow the U.S. and global economy to undergo the necessary cleansing process in a controlled and orderly way. But instead of allowing that to happen, the launch of QE2 and everything since has not only delayed the cleansing process but has also resulted in new excesses being accumulated in the process. This is where I disagree with the Fed's policies, but that does not take away my respect for Ben Bernanke the individual in charge. This is an important distinction and I'm glad that you raised it for discussion.

    Thanks again for your comment. I appreciate it.
    Jan 25, 2013. 10:49 AM | 4 Likes Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello Craig - Thanks so much for your very kind words about my article. I really appreciate it!

    I enjoyed reading your latest article on Wal-Mart. I thought it was excellent and I agreed with all of your key points about the appeal of owning a stock like Wal-Mart in the current environment.

    http://seekingalpha.co...

    I look forward to reading your future articles on SA.

    Thanks again.
    Jan 25, 2013. 10:41 AM | Likes Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello Loon-a-tick,

    This is a great comment and I appreciate you sharing your view here on my article. You raise a particularly important point that I've mentioned in the past but neglected to include in this article. While I believe we will eventually need to undergo a final harsh cleansing process before this current episode is finally over, I strongly believe that the beginning of the next great secular bull market for the U.S. economy and its financial markets resides in the aftermath. Our global leadership in technological innovation and energy resources like natural gas along with the fact that productive efficiencies have reached the point where we are bringing manufacturing back to the United States all set up for the next great expansion once we get through to the other side and cleanse the system of its excesses. It may be a few to several years down the road, but it will be a great new dawn once we arrive at this point.

    Great comment and thanks again.
    Jan 25, 2013. 10:16 AM | 1 Like Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello Capt. Spauding - Thanks for your very kind and generous words about my article. I genuinely appreciate it.

    I hope everything is going well with you in the New Year. Thanks again.
    Jan 25, 2013. 10:12 AM | Likes Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello cagey1,

    Thanks for your comment and for raising a particularly important question about the performance of my past recommendations. In regards to MBB, I exited this position a few months ago and would consider this an investment theme that was generally disappointing in the end. There were two primary drivers behind this positioning - one that the global economy and corporate earnings would slow in 2012, which would benefit defensive fixed income such as MBB and two that the Fed would focus its asset purchases on this area of the market. While both outcomes came to pass, what I underestimated was the continued aggressiveness of the Federal Reserve to up the ante even further and launch into yet another aggressive round of quantitative easing. Heading into 2012, it seemed that the mounting political pressure would keep the Fed in check, particularly as we moved through an election year. Clearly, I underestimated the boldness of the Fed, which favored risk assets over positions like MBB particularly in 2012Q3. Given this monetary policy shift, I've since reallocated to the more aggressive fixed income categories such as Investment Grade Corporate Bonds (LQD).

    Another investment theme that has continued to prove elusive is the precious metals complex including Gold and Silver. While a consolidation phase for both precious metals was long overdue coming out of 2011, this is a process that is more than completed at this point. Moreover, although we have seen the virtually uninterrupted accumulation of both gold and silver over this time period, the prices have not responded accordingly as of yet. But with the Fed set to print more than $1 trillion in the coming year along with stimulus from the other major global central banks, this increased supply of money and the potential degrading impacts on the fiat currency system are just a few of the tailwind pressures that continue to build under the precious metals complex. So although both gold and silver have yet to respond in a sustainable way like stocks have since the summer of 2012, the potential for upside at current levels is now far greater than it was before and is still likely to play out favorably in the long-term.

    Thanks again for your excellent question. I will look to incorporate more of these retrospective points in future articles.
    Jan 25, 2013. 10:09 AM | 4 Likes Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello Heilbroner,

    Thanks for your comment and excellent points. One area where I am feeling increasingly positive has been the shift in the trend of manufacturing to bringing it back into the United States. I believe the long-term sustainability of our economy and the improving standard of living for all that live here is dependent on our ability to make a diverse range of high quality products here in our own country. Hopefully this trend will continue.

    Thanks again for your comment.
    Jan 25, 2013. 09:57 AM | 4 Likes Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello Michael,

    Thanks for your comment and for raising a lot of thought provoking points and questions here. To your points, one of my genuine concerns over the last few years and particularly since the summer of 2010 is the fact that so much power in terms of monetary policy decision making is essentially concentrated in a single individual at the Federal Reserve. The article that ran in the WSJ back on December 12 in a way gets to this point - a select few individuals all from the same school of thought that manage the worlds money supply over appetizers, wine and small talk gaze out over the Rhine and wax about the grand global monetary experiment that continues to unfold.

    http://on.wsj.com/VO0N1u

    While I believe their intentions are good, I'm not sure this is the best structure to administer monetary policy in the end. I suppose only time will tell.

    Thanks again.
    Jan 25, 2013. 09:54 AM | 8 Likes Like |Link to Comment
  • Fear And Loathing On Wall Street [View article]
    Hello Randle - I appreciate your comment and thanks for your outstanding response. Your reply is great - Thanks again!
    Jan 25, 2013. 09:43 AM | 1 Like Like |Link to Comment
  • The Latest Game Changer For Stocks [View article]
    Hello Michael,

    Thanks for your great comment as always. I have been actively thinking about an article on the points that you have raised for the last few weeks, as I believe it is a key point for how the inflation story plays out today and going forward to examine where the money is getting locked up in the system and what will begin to happen if and when it all begins to leak out into the broader economy.

    Great ideas as always. Thanks again and I look forward to talking with you soon.
    Jan 25, 2013. 09:31 AM | 1 Like Like |Link to Comment
  • The Latest Game Changer For Stocks [View article]
    Hello thucydides123,

    Thanks for your comment. I hope that everything is going well with you in the New Year. I am very interested to see how the new GOP strategy and the Democratic response both in the White House and the Senate changes the framework of the debate in the coming months, but I think it may lead to less market volatility in the meantime. 2013 promises to be another interesting year.

    Thanks again.
    Jan 25, 2013. 09:28 AM | Likes Like |Link to Comment
  • The Latest Game Changer For Stocks [View article]
    Hello jhooper,

    Thanks as always for your comments. As I've mentioned before, yours is among the very best commentary on SA and your latest here is outstanding on a variety of points.

    I agree completely with your point that the set up for this latest round of QE is distinctly different primarily due to the fact that it is unbounded. One of the questions that I've been trying to examine in recent weeks is differentiating factors that help determine that the breakdown toward the middle of QE2 was due to forces other than the market bracing for its eventual end in June 2011, for this is a key theme in determining exactly how long markets will be able to run higher under the current program. Hopefully I will be able to finalize this work soon.

    And the second question that you raise regarding an analysis on the dual impacts of monetary and fiscal policies on asset prices over time is also something that I have been thinking about recently, so I completely understand where you are coming from here. I am going to look further into this based on your commentary here.

    Thanks again for your great commentary. I appreciate it.
    Jan 25, 2013. 09:26 AM | Likes Like |Link to Comment
  • The Latest Game Changer For Stocks [View article]
    Thanks echinio9 - I appreciate it!
    Jan 25, 2013. 09:18 AM | Likes Like |Link to Comment
  • The Latest Game Changer For Stocks [View article]
    Hi Rich,

    Thanks for your comment. I appreciate it. And you've raised some good questions here. In regards to how long the effects of QE will last, I think this will depend on the eventual duration of the program. Unlike past QEs, the current iteration is boundless, which to jhooper's point below could lead to a market running much higher and far longer than anyone may be anticipating right now. But until the underlying structural issues are finally addressed, we are likely to see one of two outcomes, which is a renewed bout of deflationary pressures the next time the Fed finally steps away or an explosion of inflationary pressures (most likely in asset prices) from the Fed and other central banks increasing the money supply so much that the spillover into global raw materials prices starts to spiral higher. While many dislike gold under the deflationary scenario, I actually favor owning gold under both outcomes, as gold also provides security against full blown crisis in either outcome.

    Great questions. Thanks again.
    Jan 25, 2013. 09:18 AM | Likes Like |Link to Comment
  • The Latest Game Changer For Stocks [View article]
    Hello Youngone91,

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

    Great call on MGN in particular in recent weeks. It has had a very nice run since mid-November as well as year-to-date.

    Thanks again.
    Jan 25, 2013. 09:13 AM | Likes Like |Link to Comment
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