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Kevin Flynn, CFA

 
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  • Beware Of Mr. Market [View article]
    I don't think that we are at the top of the market either, mostly because I don't think the market has gotten dumb enough. Valuations reliably go past the really stupid line in either direction.

    Betting on what Putin will do is worse than betting on a flip of the coin, because while we will all accept that a coin flip is 50-50, with Putin we can easily talk ourselves into what we want to believe rather than confess ignorance. Personally I would rather keep some money on the sidelines rather than try to guess at a choice that could quite possibly change from week to week, an all-too-frequent path of politicial decisions.
    Aug 28 10:48 PM | Likes Like |Link to Comment
  • Beware Of Mr. Market [View article]
    The statement was about August volume relative to 2014: A goodly amount of the lightest non-holiday trading days in the year have come in the last couple of weeks, with the last two Mondays featuring triple-digit Dow gains on volume that wasn't just below average, but well below average (for 2014). The last two days saw the lightest volumes of the year.
    Aug 28 10:32 AM | 1 Like Like |Link to Comment
  • 3 Trends To Watch [View article]
    Cf El-Erian's take on central banks from CNBC today http://cnb.cx/1oxswaC. However, equity traders only heed this kind of thing after the damage is done.
    Aug 14 12:26 PM | 1 Like Like |Link to Comment
  • 3 Trends To Watch [View article]
    The two reasons I see most written by central bankers themselves are that one, there seems to be little to no growth bang for the QE buck anymore; two, the Fed needs to start putting some of its stuff back in the box lest it gets caught empty-handed by a crisis or the end of the business cycle.
    Aug 14 10:12 AM | Likes Like |Link to Comment
  • 3 Trends To Watch [View article]
    The Fed won't be out of Treasury buying until it stops the substantial business of reinvesting coupons and rolling over maturing principal.

    Iit's also my opinion that the Fed doesn't want to get blamed for bringing on a recession, esp before the next election. They'd still rather try to fix the broken china than keep it from falling.
    Aug 14 09:40 AM | 1 Like Like |Link to Comment
  • GDP And Fed Statement Equal More Of The Same [View article]
    I don't listen to them to find out what to do. I listen to them to gauge what the true believers are saying.
    Aug 1 03:50 PM | Likes Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    It's certainly possible, depending on the catalyst. Few seem to remember anymore that the market endured a 28% correction in 1998 when LTC froze the credit markets. The larger frights usually start there; a crisis of a geopolitical nature would have to be very serious to get as much as 10%. .

    One plausible scenario is a mild August correction, maybe one that replicates the January-February move of low to mid-single digits, followed by rebound and then a larger drop at the end of QE. However, the latter is becoming so anticipated that I'm already beginning to have doubts.
    Jul 27 09:24 PM | Likes Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    FF rates were:

    Nov 2005 4%
    Feb 2006 4.5%
    May 2006 4.94%
    July 2006 5.24%.

    The rate remained at 5.25% until August 2007. One of the principal motives for the final ascent stage was the belief that the next rate move had to be downward. Indeed every time the Fed stood pat, stocks would rally on the theory that it only made a cut more inevitable at the next meeting. I could have written "had been tightening" instead of "was" to be clearer.
    Jul 25 05:36 PM | 1 Like Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    Your definition is probably different.
    Jul 25 02:12 PM | 1 Like Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    Bob Farrell's rule #4: "rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways."
    Jul 25 01:52 PM | 2 Likes Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    One of the reasons that the Fed is exiting QE is that its own analysis is showing that QE is now adding very little to growth.

    I don't see a negative GDP print in Q3. At some point this year we should get another inventory restock that will push quarterly GDP past 3% and very possibly 4%. However, quarterly GDP prints are not great leading indicators for the stock market.

    In general, the Fed considers the budget deficit to be an issue for the elected branches and Treasury.
    Jul 25 01:45 PM | Likes Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    What I said is that a correction in the neighborhood of 10% usually precedes the final top, which could be about 10% higher from current levels.

    Let me make it extra plain:

    1) We are in the blow-off top stage of the market.

    2) Without an external adversity, the final top will probably be about 10%-15% higher from here, or about 2200-2300 on the S&P.

    3) Before we get to that level, the market typically sees a correction first. The break-out past the old high is fuel for the last top.
    Jul 25 01:31 PM | 5 Likes Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    Yes I meant John Hussman, not the Dan Hussman I used to know.
    Jul 25 10:57 AM | Likes Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    Of course I will admit it. For most of last year, I wrote that the market looked like it would top in the fall. But then the Fed lost its nerve on starting the taper in September and stocks filled in the other half of last year's advance.

    Trees don't grow to the sky, yet I have never been in a bubble period - including the summer of 87 - when the main body of investors, professional or not, would admit it.
    Jul 25 07:39 AM | 11 Likes Like |Link to Comment
  • The Blow-Off Top Is Here [View article]
    Gold can be a place to hide if it's the right sort of crisis. It fared badly during the last crash.
    Jul 25 07:28 AM | 3 Likes Like |Link to Comment
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578 Comments
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