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Eric Parnell, CFA

 
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  • After The Fed: The Battle Lines Have Been Drawn [View article]
    Hello User 427801,

    Thanks for your comment and I appreciate your thoughts. You are correct that the point here is to highlight that the markets have the potential to go in either direction, although it appears at least this morning that this direction may be decisively down. My point in this article is to highlight the key thresholds for those that are invested across asset classes that one might consider moving to the sidelines if they are decisively breached over the next few days.

    Thanks again for your comment.
    Jun 20 07:09 AM | 15 Likes Like |Link to Comment
  • This Is When The Bear Growls [View article]
    Hello Kamil,

    Thanks for your comment. As mentioned in the article, I'm not predicting that a correction will take place. Instead, I am highlighting the times when it might be likely to take place based on market events over the last century. As for the frequency of these articles being a contrarian sign, I would tend to agree with you except for the fact that I do not think the sentiments of individuals or small to mid-size institutions really matter to the direction of the market right now. This rally will continue until the computers and large institutions finally decide to turn the other direction. As a result, the current rally could go on much longer than anyone, even some of the bulls, might imagine. It will be interesting to see.

    Thanks again.
    Jun 20 09:42 PM | 14 Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    Hello all - Great comments in this conversation block. Thanks for your thoughts and perspectives. WisPokerGuy raises a particularly important point that I did not mention in my article - one of the things that was notable about today's sell off was the disproportionate pain sustained by high beta stocks, which were down -3.14% on the SPHB. And some individual recent high fliers were down -5% to -10% or more. If nothing else, today offered up a little cleansing of the froth in the more speculative names. It will be interesting to see if this continues into next week.
    Jan 24 10:40 PM | 14 Likes Like |Link to Comment
  • U.S. Economy: 4 Simple Reasons Recession Lies Ahead [View article]
    Hello Econdoc,

    Thanks for your comment. I'll be following up with a variety of data points on these topics in future posts in the coming days and weeks. As mentioned in this article, my intent here is to keep things in this post is to stay out of the data weeds and introduce themes on a more qualitative conceptual level for this article. But your point is well taken, as a statistician I am also someone that relies on data to draw conclusions. I look forward to exchanging comments with you on future posts.

    Thanks again.
    May 4 08:17 AM | 14 Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    Hello MrVincent,

    Thanks for your comment and I completely agree that a 20% at least would be very healthy for the stock market in the long-run. The fact that we have just gone through several years where "good news is good news" and "bad news is good news" is just one of the many forces that lead to a market that is wildly distorted and removed from its equilibrium fair value. For in the end, good news is good news and bad news is bad news, and every trading day when the market rose on "bad news", it moved further and further away from its true equilibrium. At some point it will need to find its way back, and a 20% correction would be a good start in the right direction and would provide a bit more long-term stability to the market as a result.

    Great comment. Thanks again.

    Jan 24 11:01 PM | 13 Likes Like |Link to Comment
  • Stocks: Why One More Major Correction Still Lies Ahead [View article]
    Hello bbro,

    Thanks for your comment. Related to your point, the fact that we had secular bear markets long before active policy interventions shows that the forces of the economy and markets in the end are greater than the actions of any individual or set of individuals that try to manage them.

    Thanks again.
    May 25 08:29 AM | 13 Likes Like |Link to Comment
  • The Good News From A Bad Friday [View article]
    Hello WallStreetDebunker,

    Thanks for your comment and for raising a good point that builds on the comment from David/David and mobyss above. One of the characteristics that makes today's market so fragile despite its seemingly relentless ability to rise is the alarm among investors that seems to take place the moment the stock market falls even by low single digits. I actually heard the word "bloodbath" thrown around today to describe the trading action since Thursday, which is almost comical given the fact that we are still only -3.3% below all time highs and are still trading at levels that would have represented new highs less than two months ago. But the quick reactivity among some market participants is perhaps an indication of the nervousness of markets trading at these levels. With all of this being said, it's always worthwhile to examine what the market is telling us at any given point in time, particularly during periods of elevated volatility.

    Thanks again for your comment.
    Aug 1 09:54 PM | 11 Likes Like |Link to Comment
  • Dividend Champions For May 2014 [View article]
    David,

    I agree with the sentiments of Norman and many others on SA. Your Dividend Champions database is an outstanding resource and I appreciate your making it available for research and analysis.

    Thanks very much for your efforts.
    May 1 11:14 PM | 11 Likes Like |Link to Comment
  • The Great Bear Market Warrior [View article]
    Hello Brad,

    Thanks for your comment and for raising some excellent points that have recently been introduced and discussed by Jeffrey Saut on this topic. A few articles back I shared an exchange with Dallas Brown on this very same topic related to Saut. I'll share some of my same thoughts here.

    I like Jeffrey Saut and think he does a good job at looking at things from a variety of perspectives in order to build a more balanced view. As a result, I enjoy listening to his commentary and his points are always well taken. And in this case, I hope that he is right in the end. But I do not share his view that we entered into a new secular bull market in 2011 for the following reasons.

    First, I would contend instead that we are currently in the midst of a cyclical bull market that is taking place within the broader secular bear market. What characterizes a secular bear market is not that stocks are going down. Instead, a secular bear market is defined by stocks moving in a violent sideways pattern with sustained corrections (2000 to 2002, 2007 to 2009) followed by sustained rallies (2003 to 2007, 2009 to present). While we did experience a -20% intraday correction in 2011, it came within the confines of what has been a larger cyclical bull market that began in March 2009 and was insufficiently long at roughly 2 months to definitively define the higher nominal lows that defined previous secular bear market bottoms.

    Also, what has historically defined the end of a secular bear market is a major valuation wash out where stock price multiples move sustainably below trend for an extended period. Not only did this not take place in 2011, stock valuations have lingered well above trend throughout the entire secular bear market to this point. This suggests that the current secular bear market may end up lasting far longer than most expect, as it indicates that the economy and markets have yet to undergo the cleansing of the excesses that are required to set up for the next major secular bull market phase. The fact that we are back to record high leverage with many of the same types of lending activity we saw prior to the 2007 to 2009 episode suggests policy makers and market participants still have not taken the much needed medicine to finally resolve the ongoing issues.

    With all of this being said, I hope Saut is right and I am wrong, as this would suggest that our economy and markets are in much better shape. Only time will tell I suppose.

    Thanks again for raising some great points.
    Apr 25 07:08 AM | 10 Likes Like |Link to Comment
  • The Four Horsemen Of The Stock Market Apocalypse [View article]
    Hello Tack,

    Thanks as always for your comments. I look forward to reading your thoughts and perspectives in any discussions that unfold in the comment section.

    While my inclusion of the word apocalypse was used with the intent of keeping to the references made in The Book of Revelation in the New Testament of the Bible, your point is well taken that this word in the title might be seen as a bit provocative.

    As a result, I think it is worthwhile for me to take this reference a step further. Working off of the literal translation of apocalypse to mean "revelation" or "unveiling", I believe that any such major market correction would be one that would not be destructive and terminal but instead would lead to a positive new order and return to more ethical and constructive free market behavior in financial markets. One of the themes that I have repeatedly stated in my articles for many years on SA that we would find ourselves at the dawn of a new secular bull market once a final corrective cleansing process was allowed to play out in investment markets. Such a transformation would hopefully include a renewed focus on personal responsibility, no longer assuming undue risk with the intent of passing along losses and a recognition that true fiscal and monetary discipline instead of reckless indebtedness is the most sustainable path to long-term growth. And if it requires financial markets to endure some short-term pain and cleansing in order to at least partially arrive at any of these outcomes, it would be worth it in the end. But given the innovations in technology and health care along with burgeoning energy sector growth and the potential for a renewed phase of manufacturing strength, I remain very bullish on the long-term outlook for the U.S. economy in the 21st century once we are finally able to emerge from the circumstances that continue to drag on the economy today.

    So in short, any reference to apocalypse here is intended more with the thought of transformation in bringing our economy and markets to what is hopefully the beginning of the next great secular bull market. It will be interesting to see how it all plays out.

    Thanks again for your comments and your insights. They are appreciated.
    Mar 14 10:48 PM | 10 Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    Hello Just Some Guy,

    Thanks for your comment. I agree completely on the importance of the 200-day M.A. at this point. And you also hit on a key topic that I was thinking a lot about today, particularly with the next Fed meeting on deck next week. If the market continues to sell off next week and the Fed reacts to it by not furthering its taper, investment markets are in even bigger trouble at some point further down the road, as such a move would send the entirely wrong message at this stage that the market simply cannot take any pain no matter how high it has been inflated. I sincerely hope the Fed sticks to their discipline in moving toward the exits on QE3 next week. It will be interesting to see.

    Thanks again.
    Jan 24 11:04 PM | 10 Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    Hello whitehead1 - I could not agree with you more on your comment here. We have had a market that has done nothing but go straight up over the last year, but we have the first meaningful down day in half a year and the news is talking about the market "tanking" and 401k accounts taking a "beating". Is a beating falling back to what was an all-time high just a few weeks ago. If this is any indication of the pain tolerance of stock investors at this stage, it is a bad sign for what may lie ahead once a real correction gets underway.

    Thanks again for your comment.
    Jan 24 10:50 PM | 10 Likes Like |Link to Comment
  • The 7 Reasons Why People Hate QE [View article]
    Hi Bob-T,

    Thanks for your comment and for raising a good question. The timing of the flash crash occurred almost immediately after the end of QE1 in the spring of 2010, and it could be argued that the void of liquidity that was left once the Fed withdrew their daily stimulus injections may have contributed to the shock. And the fact that the market is artificially inflated by monetary stimulus leaves open the greater potential for new violent air pockets of volatility during the moments when the HFT trading algorithms that are among the remaining contributors to the limited trading volume and liquidity on today's exchanges suddenly break down.

    As to your point about QE, I completely agree with you as it relates to QE1, the Fed should be commended for preventing the global financial system going over a cliff in late 2008 and early 2009 through their actions. But once the economy had been pulled back from the brink and stabilized by the summer of 2010, the opportunity existed to allow the financial system to cleanse itself and subsequently heal. Instead, we entered into QE2 and the distortions since have become vastly worse instead of better in many ways at least in my opinion.

    Thanks again for your comment and for sharing your perspective.
    May 24 10:53 PM | 10 Likes Like |Link to Comment
  • The 7 Reasons Why People Hate QE [View article]
    Hello shourey,

    Thanks for your comment. I usually don't get a chance to tune into Fox Business News so I can't speak about them, but I find that a number of guests and commentators on both CNBC and Bloomberg speak openly both for and against QE on a daily basis. The same could be said for most of the major print and online financial publications, so I don't believe that the opposition to QE is limited to a specific political ideology. But I appreciate your sharing your views on this point. Thanks again.
    May 24 10:38 PM | 10 Likes Like |Link to Comment
  • Bernanke's Kryptonite [View article]
    Hello skyraider,

    Thanks for your comment and for calling me to participate in the discussion. If you've followed my past articles, you'll know that I almost always jump in an actively participate in the comment discussion. Given that I posted the article late Saturday night and today is Sunday, I was spending the day with my family and have only had the chance to get online late this evening. I've enjoyed the discussion so far and look forward to posting more in the coming days.

    Thanks again.
    Feb 18 12:13 AM | 10 Likes Like |Link to Comment
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