The Small, But Important, Flaw In The Tepper Analysis [View article]
Northwest -- You need to ask yourself what the market would be in the absence of the Fed action. You are not doing that.
When a trade is made, there is no record made of "permanent supply".
Try thinking about it in terms of a stock -- like Intel or something. Suppose you have a mix of long-term buyers and traders. There is no overwhelming issue about he "supply" of Intel stock.
If you are willing to bid more, the supply will be there.
Try also thinking about the Treasury auction, as I explained in the article.
That is my best effort to explain. If you don't get it, you will soon learn.
The Small, But Important, Flaw In The Tepper Analysis [View article]
Frog -- It is pretty easy to know where I stand, since I write a weekly article on SA that analyzes news from each week and discusses both investing and trading time frames.
If you read my profile, you will see that I am an investment manager, not someone who is selling a trend following service. Inquiries are always welcome, as I try to match some combination of our five programs to the needs of each investor.
It is always amusing when an anonymous commenter misconstrues the record of someone who has contributed hundreds of articles over several years. I always hope that most of the readers are sharp enough to see beyond this.
If you really live in Chicago, you are welcome to visit at our Naperville office. I suspect that you would leave with a better perspective and a very different attitude.
The Small, But Important, Flaw In The Tepper Analysis [View article]
mickey99 -- Market psychology is important, but I can only do so much in one article.
You are on the right track. The Fed is trying to change expectations -- particularly about inflation. They want more inflation and higher expectations of inflation. That is why rates will go up even if QE continues.
The Small, But Important, Flaw In The Tepper Analysis [View article]
Northwest -- Your comment perfectly illustrates the problem. You seem to think it is important to know the intentions of a buyer (or seller). Why?
As I write this, CSCO is up nicely on a good earnings report. For some, the stock may now have hit a price target and they will sell. For others, the news may signal better prospects. Still others will play it for a day trade.
It is a market - - with many participants, motives, and strategies.
If the Fed were not buying in the Treasury market, the paper would be held by hundreds of thousands of other participants instead -- and at a very slightly lower price.
You last paragraph (less available to sell tomorrow) is just bogus. The amount available for sale is a function of price. That is why there is a supply curve.
Weighing The Week Ahead: Will Consumers Step Up - Especially On Housing? [View article]
Richjoy - ZH is among the two or three most profitable blogging enterprises. Telling people what they want to hear is a much better business model than telling them what they need to know!
Weighing The Week Ahead: New Leadership For Stocks? [View article]
Ron - I agree with the value gained from reading a well-argued analysis from good sources, even when you know there is a bias.
As to the deep look into the employment data, most of it is inconsistent spinning. The analysis of seasonal adjustments is really terrible. The choice of indicators varies with what will convey the worst impression in a given month. They manage to criticize the B/D adjustment, for example when it adds jobs, but also when it subtracts them if the number has changed.
So the problem is that you need to be an expert to spot the errors.
They also do not cite sources in a way that allows you to verify their work.
You can get a more reasonable bearish perspective from John Mauldin.
But once again, you are on the right track. Read widely and think critically.
Weighing The Week Ahead: New Leadership For Stocks? [View article]
dancing diva -- I am only going to clarify -- not try to debate this with you.
I am talking about the long-term economic growth trend -- mostly in the U.S. but also in emerging countries, China, and Europe. You seem to be focused on the last couple of years, during which the Austerians have impaired the economic recovery.
At the Kauffman conference someone raised the question of how much more job growth would have been if we had not starved state and local government. (I do not quote by name anyone with a glass of wine in his hand, but the person is a conservative thinker of long repute -- someone you would recognize).
Despite the worst efforts of government, we'll get back to long-term economic growth trends and probably overshooot!
I am delighted that your investments have done well. Would it surprise you to learn that many who share your skeptical thoughts elect to avoid stocks?
Weighing The Week Ahead: New Leadership For Stocks? [View article]
Dancing Diva --
"Anticipating the global economy will be improving in the near term is akin to always be looking for a recession around the corner - both can be mistakes. "
You are putting this proposition the wrong way. Economic growth -- all else equal -- will eventually return to trend. It is the nature of a market-based economy to put slack resources to use. In the absence of a recession, we should expect growth to resume the trend. If we were growing above trend, I would be expecting a reduction.
This is a very important concept. The right sectors depend where you are in the business cycle. This is better measured by data than by comparing the length of time to past cycles.
As I noted in the post, the skepticism about the economy has become a multi-year phenomenon!
Donn -- We would expect some firms at the margin to react to the Obamacare changes, and the ADP report provided some support for that idea. It is something to monitor.
daro -- This week's initial claims (and last week's) were not part of the survey period. Those data represent an improvement that we might see next month.
Weighing The Week Ahead: Interpreting Mixed Signals [View article]
Lloyd -- The intent of my response was to congratulate you on your comment and also for providing another citation for us. I repeat that.
My blog agenda currently has about 50 items on it, several of which are seriously overdue. I follow many things that I do not write about at that particular moment. That especially includes the work of several people who have earned special attention. Rortybomb is one of those people. I had the good fortune to spend all day Friday at the Kauffman Conference sitting next to him and also at dinner. We covered many topics, but he did not mention his upcoming article.
The weekly piece is difficult to assemble, partly because so much is left on the cutting room floor. I don't do the "Silver Bullet" thing very often. Sometimes it is something that people have not seen, but should. Other times it is already in the news but deserves additional recognition. I am always open to suggestions.
As to the conclusions from R & R I believe that this book was costly for many. I hope to write something more extensive on this topic soon, but I am not going to compose the article in the comments.
There is a general "world ending" meme that sells well with many potential investors. While you and I would not do so, many others use this as a way of selling unattractive investments that are illiquid and include big commissions.
It was not the intent of the authors, but it was the result.
Thanks again for your thoughtful comments and the links. Let us revisit this when I get around to the bigger installment. Meanwhile, you are most welcome to link to your own work, which we would all find interesting.
Dow 20K - A Halfway Update [View article]
Do you have a better idea?
Is it better to hold cash?
Just wondering....
Jeff
The Small, But Important, Flaw In The Tepper Analysis [View article]
When a trade is made, there is no record made of "permanent supply".
Try thinking about it in terms of a stock -- like Intel or something. Suppose you have a mix of long-term buyers and traders. There is no overwhelming issue about he "supply" of Intel stock.
If you are willing to bid more, the supply will be there.
Try also thinking about the Treasury auction, as I explained in the article.
That is my best effort to explain. If you don't get it, you will soon learn.
Best of luck!!
Jeff
The Small, But Important, Flaw In The Tepper Analysis [View article]
If you read my profile, you will see that I am an investment manager, not someone who is selling a trend following service. Inquiries are always welcome, as I try to match some combination of our five programs to the needs of each investor.
It is always amusing when an anonymous commenter misconstrues the record of someone who has contributed hundreds of articles over several years. I always hope that most of the readers are sharp enough to see beyond this.
If you really live in Chicago, you are welcome to visit at our Naperville office. I suspect that you would leave with a better perspective and a very different attitude.
Jeff
The Small, But Important, Flaw In The Tepper Analysis [View article]
You are on the right track. The Fed is trying to change expectations -- particularly about inflation. They want more inflation and higher expectations of inflation. That is why rates will go up even if QE continues.
Jeff
The Small, But Important, Flaw In The Tepper Analysis [View article]
As I write this, CSCO is up nicely on a good earnings report. For some, the stock may now have hit a price target and they will sell. For others, the news may signal better prospects. Still others will play it for a day trade.
It is a market - - with many participants, motives, and strategies.
If the Fed were not buying in the Treasury market, the paper would be held by hundreds of thousands of other participants instead -- and at a very slightly lower price.
You last paragraph (less available to sell tomorrow) is just bogus. The amount available for sale is a function of price. That is why there is a supply curve.
Jeff
Weighing The Week Ahead: Will Consumers Step Up - Especially On Housing? [View article]
Nice job of spotting something that nearly everyone would miss.
Jeff
Weighing The Week Ahead: Will Consumers Step Up - Especially On Housing? [View article]
Jeff
Bernanke The Washington Super-Whale, Hedge Fundies And The Widowmaker [View article]
You seem blissfully unaware of the need to attend also to the deflationary threat -- more serious, and harder to correct.
This is a terrific, educational article. Much of the trading community has not bothered to learn much about monetary policy.
Weighing The Week Ahead: New Leadership For Stocks? [View article]
As to the deep look into the employment data, most of it is inconsistent spinning. The analysis of seasonal adjustments is really terrible. The choice of indicators varies with what will convey the worst impression in a given month. They manage to criticize the B/D adjustment, for example when it adds jobs, but also when it subtracts them if the number has changed.
So the problem is that you need to be an expert to spot the errors.
They also do not cite sources in a way that allows you to verify their work.
You can get a more reasonable bearish perspective from John Mauldin.
But once again, you are on the right track. Read widely and think critically.
Jeff
Weighing The Week Ahead: New Leadership For Stocks? [View article]
I am talking about the long-term economic growth trend -- mostly in the U.S. but also in emerging countries, China, and Europe. You seem to be focused on the last couple of years, during which the Austerians have impaired the economic recovery.
At the Kauffman conference someone raised the question of how much more job growth would have been if we had not starved state and local government. (I do not quote by name anyone with a glass of wine in his hand, but the person is a conservative thinker of long repute -- someone you would recognize).
Despite the worst efforts of government, we'll get back to long-term economic growth trends and probably overshooot!
I am delighted that your investments have done well. Would it surprise you to learn that many who share your skeptical thoughts elect to avoid stocks?
Jeff
Weighing The Week Ahead: New Leadership For Stocks? [View article]
"Anticipating the global economy will be improving in the near term is akin to always be looking for a recession around the corner - both can be mistakes. "
You are putting this proposition the wrong way. Economic growth -- all else equal -- will eventually return to trend. It is the nature of a market-based economy to put slack resources to use. In the absence of a recession, we should expect growth to resume the trend. If we were growing above trend, I would be expecting a reduction.
This is a very important concept. The right sectors depend where you are in the business cycle. This is better measured by data than by comparing the length of time to past cycles.
As I noted in the post, the skepticism about the economy has become a multi-year phenomenon!
Thanks for the comment and links.
Jeff
April Employment Report Preview [View article]
Jeff
April Employment Report Preview [View article]
Jeff
Weighing The Week Ahead: Interpreting Mixed Signals [View article]
My blog agenda currently has about 50 items on it, several of which are seriously overdue. I follow many things that I do not write about at that particular moment. That especially includes the work of several people who have earned special attention. Rortybomb is one of those people. I had the good fortune to spend all day Friday at the Kauffman Conference sitting next to him and also at dinner. We covered many topics, but he did not mention his upcoming article.
The weekly piece is difficult to assemble, partly because so much is left on the cutting room floor. I don't do the "Silver Bullet" thing very often. Sometimes it is something that people have not seen, but should. Other times it is already in the news but deserves additional recognition. I am always open to suggestions.
As to the conclusions from R & R I believe that this book was costly for many. I hope to write something more extensive on this topic soon, but I am not going to compose the article in the comments.
There is a general "world ending" meme that sells well with many potential investors. While you and I would not do so, many others use this as a way of selling unattractive investments that are illiquid and include big commissions.
It was not the intent of the authors, but it was the result.
Thanks again for your thoughtful comments and the links. Let us revisit this when I get around to the bigger installment. Meanwhile, you are most welcome to link to your own work, which we would all find interesting.
Jeff
Weighing The Week Ahead: Interpreting Mixed Signals [View article]
I urge all to follow. The initial R&R responses seem quite lame, but there is more to come.
There is a danger in your characterization of this as "pro-government" and the opposite.
I like to think about pro-investor and pro-economy. It is a better why to succeed as investors.
Anyone who got scared Witless (TM OldProf) by the R&R stuff has lost a lot of money. There was no tipping point....
Sorry about those who bought gold thinking that the US was the next Greece.....
That is what we should be analyzing.
Jeff