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Joseph Calhoun

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  • An Investor's Look at Early Cycle Indicators [View article]
    A couple of quick points. In the past, the ISM has not had to return to expansion (over 50) for the market to make a bottom. It is enough for the index to bottom and start rising toward 50. I don't know if this is the bottom. It may be and it may not be. I certainly wouldn't invest based on one data point.

    2001 is a somewhat special case. The ISM bottomed right after 9/11 and rebounded until May of 2003. The market rebounded right along with the ISM. The Dow moved from roughly 8000 to 10500. After the ISM peak in the spring of 2002, it fell back and bottomed in November 2002. The market moved in lockstep with the ISM. As I remember it, there was a lot of talk about a double dip recession at the time. The point is that the ISM bottoming was still a good coincident indicator.

    One last point. In order for this to be a bottom for the market, the ISM will need to rise over the next few months. It isn't enough just to hit bottom. In the 1982 recession (the second half of the double dip recession of the early 80s) the ISM fell, hit bottom and just went sideways for a year. The market fell the entire time and the bull market didn't start until the ISM started rising in August 82.
    Feb 3 10:08 AM | 3 Likes Like |Link to Comment
  • No Mortgage For Homes [View article]
    I am frankly mystified as to exactly what your problem is with my firm posting here. I stopped posting at SA years ago because I thought it was becoming overpopulated with people talking their own book and promoting questionable investment programs. I only agreed to let SA publish our feed recently because it appears they have cleaned up some of that. Now you come along and irritate me so much that I'm considering shutting it down again. We get published on a lot of sites on the web - and in print - and I don't need to publish here where idiots like you can feel free to impugn my integrity without knowing a thing about me or my firm or the people who work for me. We are all professionals with many years in the investment business and we take our craft very seriously. We operate as Registered Investment Advisers under a fiduciary standard; we aren't brokers selling investment products. Our fees are less than the industry average and we have extremely low turnover in our client base. We are not a large firm - yet - managing just under $200 million, all for individuals, and we cannot afford to blanket the web or print with advertising like the mutual fund companies on this page. How else are we supposed to compete and become known if we don't promote ourselves through our intellectual capital? I guess you find that offensive for some reason but I'm not sure why. Maybe you just disagree with our analysis? If so, why don't you attack the substance of the article rather than the writer?

    One other thing. You'll notice that there are no securities mentioned in this article. We don't generally publish articles about the securities we are purchasing for our clients because we consider that to be ethically questionable and a disservice to the clients who pay for our services. I notice that you have no such compunction in your articles, often mentioning securities you own personally. Maybe we should be questioning why you publish at SA.

    Don't bother responding because I will not answer any more of your comments.
    Feb 13 11:38 PM | 1 Like Like |Link to Comment
  • No Mortgage For Homes [View article]
    Mr. Gilluly,

    We are certainly not the only for profit company posting on Seeking Alpha or the only investment advisory firm. What about this article is advertising? There is nothing here soliciting your or anyone else's business. We publish our opinions openly and let anyone who reads draw their own conclusions. If they want to do business with us, they know how to find us. As for whether SA "allows this" or "if they knew" you'd have to ask the person at Seeking Alpha who contacted us and requested that they be allowed to publish our blog feed. I'm guessing they are perfectly aware of who we are and what we do. By the way, SA is a not a public forum. Traditionally, public forums are public areas (i.e. government owned - parks, sidewalks - public areas) where anyone can exercise their first amendment rights. In case you haven't noticed, SA is a privately owned, for profit space (hey, look, they have advertising!). You'd think a journalist would know the difference.
    Feb 13 09:38 AM | 1 Like Like |Link to Comment
  • Don't Let The Door... [View article]
    Actually the dollar index has been remarkably stable the last two years and gold has fallen considerably. Taken as a whole though, Bernanke's time at the Fed was one of dollar weakness and we have paid the price for that. It will be interesting to see what the dollar does as QE ends.
    Feb 3 12:01 PM | 1 Like Like |Link to Comment
  • Investor Sentiment and Market Returns: Now's the Time to Be Bold [View article]
    I've used this indicator for years and what you really want to see is a market rally and the number of bulls staying low. That indicates that individual investors have given up. Bulls were down in the low 20s at the January lows but as the market rallied, bulls jumped quickly into the mid 30s. If we get a rally and the number of bulls stays in the 20s, the bottom is probably in.
    Mar 28 05:05 PM | 1 Like Like |Link to Comment
  • Yellen Takes The Chair [View article]
    There is an interplay between monetary and fiscal policy that is unappreciated. Take, for instance, the current rehashing of the 2009 stimulus where those who favored it believe it worked and those who opposed it believe it failed. Neither side takes into account how monetary policy might have been different in the absence of the fiscal stimulus. The same is true of the debate last year about the effect of the fiscal drag. Would monetary policy have been different in the absence of tax hikes and spending cuts last year? I certainly think so. There may be no formal coordination of fiscal and monetary policy but one certainly affects the other. If the Fed were not providing monetary stimulus would the Farm Bill have been Congress' most pressing matter? Who knows, maybe they would have passed the thing off as fiscal stimulus. The point is that monetary and fiscal policy cannot be considered in isolation.
    Feb 19 12:59 AM | Likes Like |Link to Comment
  • No Mortgage For Homes [View article]
    US population growth last year was just 0.7% the slowest since 1937. That's about half the long term average.
    Feb 16 08:11 AM | Likes Like |Link to Comment
  • The Gloom Talk from the Top Needs to Stop [View article]
    To everyone making political comments here: I'm a libertarian. I don't like politicians of either party. They are all working for their own best interests, not ours. If you want to believe in a party, I suggest Mardi Gras.

    To whoever said I could be optimistic because of the various bailouts: I opposed them all. The bailouts have prolonged this situation.

    To those who say I'm cheerleading: I am trying to see the positive signs as they emerge. We know that the largest gains in bull markets (or bear market rallies) come at the beginning. If you don't catch somewhere near the bottom, you'll miss a big part of the move.

    To whoever wants to ban short selling: Short sellers aren't the problem. They add liquidity to the market and provide information. In short, the short sellers were right.

    To whoever says we live in a "corprotocracy": It's called fascism and both parties are the problem. Replacing fascism with socialism isn't the answer. You are right; we need to limit the power of government as the founders intended.

    My main point in this article is that the debate isn't new. We've been here before and if the politicians will just let things run their course, we can get through this. We will get recovery not from the stimulus but from monetary policy. At some point in the future that will mean inflation, but at first it will mean real growth. Stimulus spending that is monetized will cause an increase in GDP. That's basically what happened in the Depression; it wasn't the increase in government spending, but the fact that the Fed monetized it that caused GDP to grow at 9.4% per year from '33 to '37. We will recover.

    I don't write the headlines here and I wouldn't have chosen this one. The rhetoric is not helpful though. Sentiment plays a big part in markets and economies. I expect Obama to change his tune tonight. He needed to talk things down to get the stimulus package passed before the recovery started to happen on its own. Otherwise, he couldn't take credit for it. Now he'll turn into a cheerleader and as monetary policy gets us out of the hole, he'll claim credit. Underserved but that is politics.

    I could be wrong and maybe we are headed for another depression, but obviously I don't think so. We'll see who's right, but I respond to what the market tells me, so I reserve the right to change my mind.
    Feb 24 08:51 PM | Likes Like |Link to Comment