Peter Osterlund

Peter Osterlund
Contributor since: 2012
Google trades at 13x forward EPS. Facebook trades at 35x forward EPS.
You say that "it seems a bit ludicrous for the market to be valuing" FB at current levels.
It's "ludicrous"? Really?

Bond action is unsettling (I wrote this--http://bit.ly/Lp7dRz --about a week after I wrote Bulls of Summer by way of musing on the immediate freefall in equity prices) but commodity prices (energy, copper) anticipate greater economic activity.
On the other hand, China is flashing some truly ominous danger signals (I might try to write about that next week).
In any event, I agree with you: Something's up. Rest assured, big hands hold the throttles to the the world's major economic inputs. Let's just hope they handle the controls competently.
Yes, I understand. But, frankly, I think you're going to wait a long time for that. Maybe forever.
A lot of people got left on the sidelines of the rally off the 2009 lows, insisting all the way up that it wasn't "real." At some point, one must decide whether the definition of "real" has changed. In many respects, I envy my grandfather's generation of investors: Things just never got this existential on their watch.

No, you didn't, but I did! Just got busy and it got away from me. In any event, it's summer now, and here's the stampede...
Will do! Please keep an eye out for the follow-up on Tuesday, June 5!
Yes, indeed that was the title. But it isn't summer yet!
In all seriousness, though, the point was to alert people to the possibility that they may want to get positioned for an impending bull rally. In my case, that meant closing shorts and being watchful.
My intention with this article was to point out what I believe to be significant indications of an impending change-in-climate. While several individuals disagreed my conclusions, I've yet to hear anyone assert that the variances I highlighted are insignificant, not to mention why.
Having said that, you might (or might not) be interested in this reconsideration of the context in which things are unfolding at the moment. You'll find it here: http://bit.ly/K6jbj3
Now that you mention it, I think the "sold too soon" quote belongs Jesse Livermore. Thanks for the correction.
I'd loved to have closed my shorts here, of course. But, as Bernard Baruch once said by way of explaining the source of his great fortune: "I sold too soon."
Yes. Fascinating. Dollar fell while Treasures rose, with the 10-yr brushing against an all-time low yield. Taken a face value, one could say the market is pricing in a deflationary environment--e.g., a depression. In a leveraged environment such as ours, that outcome would be lethal, and we can be sure that Ben B. and his fellow central bankers will do all they can to fight it and that, should they fail, t-bonds won't do investors much good; they'll be better off with crossbows.
So for just what, exactly, is the market discounting?
Could not agree more. Trend is your friend...until it ends.
And of course, one's perception of trend depends on one's timeframe of interest. A violent downtrend on an intraday or even daily timeframe, can be a welcome pullback on a weekly or monthly scale.
Bottom line: We agree that it's been quite the downtrend for the past month. I'm out of my shorts now. You aren't. Great! That's what makes a market!

Yes, indeed. "Trade what you see, not what somebody else thinks..."
I see I somehow conflated my response to you and to Larry Reaves in my response, above, to Larry Reaves. Still waking up, I guess!
Spot on. Couldn't agree more.
Well, I did keep this article focused on one significant piece of the puzzle many people tend to overlook: The performance of "bear trades" and "bull trades" relative to major indexes. And, although an historical survey of the relevant data points is beyond the scope of this exercise, the material is "out there", amply documented by individuals far more capable than I
But since you mentioned issues of global performance...
You're right, of course. If the world doesn't perform, neither can the US. But that was a problem a year ago. Greece was a problem. Japan was a problem. China (w.r.t. stimulation of domestic demand) was a problem. That hasn't changed. What has changed, however, is the Merkozy austerity axis: In fact, it's now gone. As for Asia, look no further than China's lowering of bank reserves to see where the region's headed.
As for the rocket fuel, we've been stockpiling some of it over the last few weeks. It's called short interest.
Not sure what you mean w.r.t. USD, but, yes, rising dollar will drag on equities for now
Well yes, there's that. But, to paraphrase Keynes, sometimes the crowd can seem "right" for a lot longer than one can remain solvent...
I agree with you, if by "technicals" you're referring to price-based indicators like MACD, etc. Inter-market correlations are another thing.
As for valuations, etc. I know markets' seeming arbitrariness can be frustrating, but I'd urge you to be wary of the trap that says "nothing matters." Fundamentals like earnings and growth do matter, even if the markets' seeming distortions of their apparent value can be overwhelming at times. Bottom line: In the long run, laws of economics cannot be suspended any more readily than laws of physics and even the Fed can't sweep back the ocean with a broom.
Fair enough. Just to be clear: This is not intended as a timing signal. Rather, I take it as an indication of the climate going forward. In other words, shorts initiated here do not, in my opinion, present a favorable risk/reward profile. But we'll see.
Good cite on funds rate; I agree. As for gold, you may be right, but there seems to be so much central bank meddling with spot gold lately that its utility as a sentiment "tell" strikes me as a bit suspect...at least for now.
Thanks. And I'm sure the Obama administration hopes so, too!