Northrop Puckett

Contrarian, macro
Northrop Puckett
Contrarian, macro
Contributor since: 2013
Company: Law Office
Happy for you longs. Today was a nice start.
Thank you all for your comments.
The beginning:
Under section Kodiak Fundamentals, I wrote North Dakota saw 55,000 new wells in July. That's a typo. Should read the state saw 55,000 new barrels per day. Also, 100 new wells, not total.
I am using average bank/economist estimates of a $20B taper in Sept. Maybe it will be later than that and less than that ($10B?) but right now that's what seems likely. You are right though -- much will depend on that.
I don't expect an end to the secular bull market yet, but the market has risen the past 8 months mostly due to multiple expansion, which definitely hasn't shown itself in the earnings so far. I kind of expect the multiples to decrease a little more (today's relief rally aside). We shall see.
Good investing to you.
Interesting article. Thank you Mr. Schaefer.
My hunch is that so much money will flow from bond funds into equities when people see their statements, that it will keep earnings disappointments from doing too much damage to the indexes. Plus the "Bernanke Put" seems to be back in effect... When the taper of bond purchases begins this Fall, it will be interesting to see how high yields go. That could do damage/slow the economy.
In a investment world where good economic data is "bad," and bad economic data is "good," it can be confusing. I could see a LT investor using the 233 daily EMA as a bear market line...
I agree that earnings are a primary market driver, but the past 5 years show a striking correlation between monetary base and market moves:
Additionally, showing the downward trend in US, Japanese, and German bond rates doesn't prove that Fed easing isn't propelling the stock market. Japan has been easing for the past 20 years. Germany has kept money relatively tight, but it has low rates because of its safe and powerful economy. Essentially, while you could argue that the three countries have different monetary/fiscal policies, the real similarity causing the relative low rates is likely that they have strong economies and are safe places to put money. Similarly, if you took three strong S&P companies with vastly different business plans but strong income statements, they would all have relatively low bond rates because they are safe places to put money.
I agree generally. Not sure mobile is going away. However, console is a whole different beast. I believe the game play on consoles will keep getting more in-depth and story driven, with better graphics. I believe prices will be able to rise and these games will ALL be downloadable, like they are for Steam, and margins will get better for gaming companies. Just different animals. Anyone that has spent a lot of time gaming (me...) knows the allure of a great console gaming experience.
I believe I did send it in to editors as "Solid"!... Sometimes editors change things, at least that's the theory I'm going with. Maybe it was my fault... Copper broke key support last night on Cyprus & China news, so this may really test its $31 support.
I think you are correct, and that's probably what Qatar thinks too. Gems and precious metals should hold their value well in a world awash flooded with money.
"none of these two" when I listed four... the hazards of writing before you have your coffee....
Forgot to mention, recent gold prices can also be reflection of view that Fed ends stimulus sooner, rather than later...
I know I'll get killed for that title... It wasn't my first choice, but editors can be persuasive. First choice for title: "Crouching Dollar, Hidden Bonds." Much vaguer, how I like it.
The bonds breaking out of the channel are what have me transfixed. Not down today...
Best comments yet on an article I've written. Thanks for the feedback and commentary everyone.
Who said sell, haha? I just enjoy trying to predict market movements. It depends on your time frame. If you are a buy and hold investor, then don't sell, or maybe use a collar. If you trade more frequently -- like a swing trader -- a move like this would be more relevant. That's why I didn't say "sell now." All depends on your style of investing/trading.
Personally, I use opportunities like this -- where I see a moderate pullback in a larger bull market -- to add puts as a hedge. If we sell down to 1460, it would help offset losses.
Thanks for the comments Frank. Not sure about the Fast Money thing you refer to, since I don't have TV. I spotted it as holding of Einhorn and the other "hedgies," and thought it would be worth exploring. Also sorry about the spell-check. It does usually catch most things.
Hi Stanley,
My feeling is that we see a moderate pullback in next couple weeks. I am not calling a top.
I believe the bull market continues as long as the Fed is infusing liquidity, and we eventually see new highs. I don't think earnings are indicating growth that would probably precede a hiring boom, so the Fed will continue QE...
Maybe recent increases in consumer spending, especially by <90k earners, indicates their debt has been paid down enough for them to start making bigger purchases. And this could lead to more widespread earnings growth, then hiring, etc... Its probably just easier to watch the monetary base.
Check this out from Caldaro:
Best, N.P.
I agree Eagle, probably too many people predicting it, but seeing JNK diving the last week got me suspicious. I guess that is why I'm only leaning towards a mini-pullback to 1490 for now...