Phil Anthropy

Pundit Failure: We Are in a Bear Market and This Is a Recession

It would be helpful to have the pundit tool saved in an Excel format that can be read by Excel 97. The current tool blows up Excel 97, and Microsoft's solution is to upgrade it (I don't think so). Those who are fervent about pointing out losers should be equally willing to post lists of winners, because there are many. Although in a classical economy we would be in a recession, we will not have one. This is because we are no longer operating in the usual model. For instance, our deficit spending should have weakened the dollar and raised interest rates years ago, taking us into a recession, and correcting our excesses. Instead, China, Arabia and possibly the Fed have bought our debt and kept interest rates low. When banks begin to fail, sovereign funds and the Fed step the rescue. We are no longer operating in a free market economy. Instead, we are operating in a financial oligopoly. The way to make money in this market is not to narrowly anticipate macroeconomic conditions, but rather to find bloggers or advisers who seem to be correctly predicting this chaotic market through whatever tea leaves they are reading, and follow their advice, both on the upside and the downside, because other than general sector momentum and market trends, individual stocks are fluctuating wildly in both directions in this circus we call the stock market.

Pick Up Undervalued Financials - Barron's Interview

The only question is where the bottom will come. As a practical matter, the U.S. and the rest of the world cannot permit major financial institutions to go into Chapter 11. It would disturb the sacred cash cow. Therefore, the financials will indeed improve over the next few years, and probably very well, but I think it is important to take a cautious approach to putting on a position. I have tried unsuccessfully on several occasions recently to catch a bottom in Citigroup (C), and have taken losses in the process (could have been worse, but wasn't fun). The Cramer strategy of putting on 25% and then adding in increments (dollar cost averaging down, essentially) as the stock falls is one method. Another is to use technical indicators and charts to try and hit the bottom with precision, and then put in most of the marbles at that point, in hope of a rapid rally early next year. It is clear that tax loss selling will weigh on the financials throughout December. However, if they don't trend upwards in early January, then there is cause for concern that the recovery may take a long time, in which case there could be other investments with better returns and less risk.