Seeking Alpha

"We told you so." Seriously? Barron's thumps its chest in the sort of self-congratulatory,...

"We told you so." Seriously? Barron's thumps its chest in the sort of self-congratulatory, bullish article that could give a fan of stocks pause. "If there's a great rotation going on from bonds to stocks, we may be only in the top of the first inning," says Jason Trennert. The 60/40 stocks/bonds mix is out of favor with many institutional investors, notably big college endowments, which now have 27% of assets in stocks vs. 45% a decade ago.
Comments (156)
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    This gets me worried. Financial journalists are usually wrong. Hopefully QE will be able to counter the positive articles.
    2 Feb 2013, 09:28 AM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    Mac:

     

    Punditry of all sorts, bull or bear, is meaningless, more than right or wrong, per se. It's only accidentally either unless the underlying data, independent of the punditry, supports the conclusion. For the moment, the capital dispositions are still lopsided away from equities, so this incontrovertible fact will support share prices and provide resistance to any attempts at major downside moves (barring some unforeseen cataclysmic event).

     

    Many of those that keep making predictions on how it "feels" or what "sentiment" is keep ignoring the hard, cold factual data. In the end, the data always wins.
    2 Feb 2013, 11:24 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I fully agree on the facts. I just don't like financial journalists saying We-Told-You-So. Bad omen.

     

    The rotation will happen. People can take lower than low yields only for so long. So I do agree that equities have a long, long way to go. I just wish Barron was calling a top instead like most SA commentators.

     

    Call me superstitious but I have a good thing going here for years now and I don't want to mess it up.
    2 Feb 2013, 11:28 AM Reply Like
  • muoio
    , contributor
    Comments (2957) | Send Message
     
    Time will tell.....but I would side with you.....the last time we had this level of bubbly .....well.....many were cut in half.....
    2 Feb 2013, 01:07 PM Reply Like
  • The Last Boomer
    , contributor
    Comments (880) | Send Message
     
    I am not sure yet about this rotation thing. This is from Bloomberg today:
    “We had a very strong January in terms of inflow, into bond funds,” El-Erian said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu today. “If the ‘Great Rotation’ is happening, it’s not happening at Pimco. What we are seeing the equity funds, the fixed income funds, the commodity funds, is a rotation out of money market funds and out of bank accounts that no longer have complete FDIC insurance. Cash is being pushed into both the equity and fixed-income markets.”
    2 Feb 2013, 07:41 PM Reply Like
  • The_Hammer
    , contributor
    Comments (3806) | Send Message
     
    The facts are tack we got this nutcase printing like mad enabling the politicians to spend like mad. Parabolic govt debts to prop up an economy.
    2 Feb 2013, 09:48 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    So why wouldn't you go long the parabolic economy that will be the result?
    2 Feb 2013, 09:55 PM Reply Like
  • thomasone
    , contributor
    Comments (87) | Send Message
     
    Yes, but check on the herd for entry and exit points
    2 Feb 2013, 11:45 PM Reply Like
  • marketwatcher23
    , contributor
    Comments (935) | Send Message
     
    Barrons got one right. It was about time.
    2 Feb 2013, 09:30 AM Reply Like
  • The Geoffster
    , contributor
    Comments (4008) | Send Message
     
    I was wondering which way the wind was blowing today.
    2 Feb 2013, 09:34 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Unemployment up.

     

    Wages stagnant.

     

    Debt WAY up.

     

    Jobs still going overseas.

     

    Inflation at the grocery store.

     

    Oil prices up.

     

    Stocks are walking a tightrope here.
    2 Feb 2013, 09:48 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    No tightrope there, my friend. It's a very sturdy and wide bridge called QEternity. Watch and learn.
    2 Feb 2013, 09:57 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    QE leads to inflation which leads to expensive personal debt which leads to buying less stuff which leads to much lower earnings which leads to stock prices falling off a cliff.

     

    Also, when everyone says that "THIS TIME ITS DIFFERENT" it is time to run, don't walk, to the exit door.
    2 Feb 2013, 10:07 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Is that why personal debt is falling in the USA?
    2 Feb 2013, 10:08 AM Reply Like
  • Rousseau SC
    , contributor
    Comments (284) | Send Message
     
    Personal debt has fallen because the banks have cut people's credit lines and have cut off a huge segment of the population from getting credit other than from loan sharks. Payday loans companies, title loan companies, pawn shops on every other block in many neighborhoods; sometimes more than one on a block
    2 Feb 2013, 01:50 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    And how will this change when there is inflation?
    2 Feb 2013, 01:53 PM Reply Like
  • icandoitdon
    , contributor
    Comments (611) | Send Message
     
    yeah, americans are so frugle it's starting to worry the merchants.
    2 Feb 2013, 04:41 PM Reply Like
  • silverscreen
    , contributor
    Comments (180) | Send Message
     
    @Value, you will be right in the long term. In the mid-term though, inflation is low. The inflation crowd (myself was included) has been expecting the inflation to skyrocket for a couple years now, with nothing to show for. I think the de-leveraging force is so big that even the biggest print shop of the planet (the Fed) can't do 180-degree turn against it. So we have the delicate balance between macro cycle (de-leveraging) against the printing machine. This happened before in history to a lot of empires, and the macro cycle eventually won out every single battle, and the empires eventually were destroyed. What is unprecedented this time is the world economy has become one single global interconnected web, and the Fed pretty much represents the whole world, not just a single empire. That's why the dollar hasn't collapsed despite all the printing.
    2 Feb 2013, 04:43 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Silverscreen is spot on (except macro always winning out).
    2 Feb 2013, 04:55 PM Reply Like
  • RS055
    , contributor
    Comments (1865) | Send Message
     
    Stocks care about earnings and interest rates. All that other stuff - unemployment ? - well on the margin this is a positive because it keeps the Fed loose as a goose.
    Wages stagnant - not much of an isue for the large multinationals - who do more han 50% of their sales overseas.
    National Debt? Not sure this is a big issue - other than for TV
    Inflation?- Good for companies that produce the stuff that is inflating. Moreover, te resulting negative real rates push folks into equities rather than bonds.
    Oil prices up - again good for companies that produce it, selectively bad for users of energy - like transportation( hehe - that was a trick answer - because transportation stocks have been on fire - go figure)
    If you are trading stocks on a horizon less than a year - you are always walking a tightrope - not any different today!
    Best Regards!
    2 Feb 2013, 04:58 PM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    silver:

     

    Hyperinflation occurs when monetary expansion is accompanied by production collapse. The chances of that occurring anytime soon in the U.S. is extremely small. Cries of Zimbabwe, Weimar, here we come, are misplaced.
    2 Feb 2013, 05:09 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Tack, it is really very simple.

     

    Money velocity * Money supply = price * quantity

     

    Assuming steady money velocity, increased money supply only leads to increased price if quantity doesn't change. But, of course, that only happens in failed states where production collapses, like Zimbabwe. Chances of that happening in a strong, first world country like the USA is slim to none.

     

    That's what the inflation peddlers miss. Besides, right now, money velocity is dropping while PMI reports indicate that production is going up. This means a lot more money supply growth will be needed to lead to inflation.
    2 Feb 2013, 05:14 PM Reply Like
  • Left Banker
    , contributor
    Comments (1830) | Send Message
     
    DVL: Not sure you have it quite right. Inflation is a great way to dispose of personal debt. Mortgage underwater? Wait, with an inflationary housing market you'll be breathing fresh air again soon. And you did refinance when rates were something like 3.5%, didn't you? Student loans killing you? Hang on a bit, pretty soon you'll be paying them with fifty-cent dollars thanks to Mr. Inflation.

     

    Goes for the gov't too. Running huge deficits and drowning in debt? Just pay it back with PostInflationBucks, at dirt cheap rates that you locked in when no one was paying attention. Huh? What's that you say? You're buying Treasuries? My sympathies to you and yours.

     

    Why do you think bankers hate inflation so much? Why do you think the central banks of the world have convinced everyone that the greatest possible evil is inflation. Not recession. Not runaway unemployment. Inflation. Huh? Who gets hurt by inflation? Who gets hurt by recessions and unemployment? Which is really the worse option?

     

    Regular folks can benefit depending on how prepared they are. But... you have to protect your wealth from the devastating demons of inflation-hell. Not all the dividend worshipers here at SA are as cognizant of the perils of those demons as they should be.
    2 Feb 2013, 05:39 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Macro:

     

    People who say "personal debt is falling in the USA" are people who don't have kids in college.
    2 Feb 2013, 07:54 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I just look up the numbers. Easier that way than having to raise a kid for 18 years and making sure that (s)he scores well in SATs.
    2 Feb 2013, 07:56 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Payday Loans @ 117% APR!!

     

    http://bit.ly/14HDGgT

     

    ...anyone who says that debt is under control in America is dreaming.
    2 Feb 2013, 07:58 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Seriously! As long as there is ONE person taking a payday loan, ALL Americans must be heavily indebted.
    2 Feb 2013, 07:59 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Inflation at the auto repair shop.

     

    Inflation at the gas station.

     

    Inflation at concerts and sporting events. ($10 beers!)

     

    Inflation in the stock market.

     

    Inflation in the bond market.

     

    Inflation starting again in the housing market.

     

    Our economy is not growing based on producing things, wage growth or non-deficit spending that's for sure. The growth is all in the inflation.
    2 Feb 2013, 08:03 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    You do know that gas prices still have not recovered to the 2008 highs, right? That must be massive inflation.

     

    You do realize that stock and bond markets do not count when it comes to measuring inflation? It is measured on goods and services?

     

    You do realize that housing market is nowhere near its historical peak? That much be massive inflation again.

     

    Food prices are up, indeed, and that's why everyone keeps going back to it. However, it is only one small part of the overall budget for the typical American family.

     

    Concerts and sporting events is a nice twist though. Unless we control prices there, world as we know will end. Soon.

     

    That was very creative. Thank you. You should let the Feds know that it should raise rates so that sporting events cost less.
    2 Feb 2013, 08:09 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    LeftBanker:

     

    That trick only works with inflation in wages too.

     

    That debt may be less expensive but the paycheck that you are going to have to pay it off with is ALSO less expensive.

     

    That is the problem.

     

    Now only if you could pay your debts in gold and silver...
    2 Feb 2013, 08:10 PM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    DVL:

     

    Let's just take one example, UNIT auto sales:

     

    2007 - 9.52MM
    2012 - 14.57MM

     

    Increase 53%

     

    There are lots more like this one.

     

    Apparently, it's not all inflation.
    2 Feb 2013, 08:16 PM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Tack:

     

    ...and what was the population in 2007 and 2012?
    2 Feb 2013, 08:22 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Tack, I think DVL got you there. Any self-respecting doom and gloomer knows that the US population increased by far more 53% between 2007 and 2012.

     

    The real increase of course is less than 10%. But still you have to give DVL credit for creativity.
    2 Feb 2013, 08:25 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    I dont know where you get your info. I googled mine.

     

    You are correct 2012 @ 14.5 million

     

    A little off on 2007. I have 16.15 million.

     

    Guess we are not there yet.
    2 Feb 2013, 09:27 PM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    Mac:

     

    My error. Should have shown that nadir at June 2009 and the peak was through November 2012:

     

    http://bit.ly/WNFdhU

     

    The 53% rise since then remains unchanged, just in a far shorter period, even better.
    2 Feb 2013, 09:50 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    Completely different period.

     

    The numbers are horrible! 4 years of zero rates, etc, etc, and auto sales no where near pre- crisis numbers.
    2 Feb 2013, 10:08 PM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    Macrotrader:

     

    Yeah, a 53% increase in less than four years is just "horrible." Home sales and prices are not back to previous levels, either, so that must be terrible, too. Of course, none of it has anything to do with the current trajectory.

     

    Believe any self-serving pessimism that rows your boat, but somebody said there hasn't been any growth in consumption, just "inflation." It's simply unsubstantiated pure poppycock. Things have been growing and moving upward relentlessly since the nadir in earl 2009. It doesn't matter if one examines auto sales, retail, home sales, construction, corporate revenues, corporate profits, etc. It's all been upward. Feel free to debate the rate, but not the direction.

     

    Repeatedly, I get the impression in SA that there's a cadre of folks who have had bad personal experiences and/or made horrendous investment decisions (like selling at the bottom of the crisis) and have a vested interest, as they've been left behind, in maintaining a pessimistic outlook and declaring that everything since has been "phony" or, perhaps, didn't even happen at all. The only thing such delusions have accomplished is to keep these people on the losing side of the ledger and making more bad decisions.
    2 Feb 2013, 10:29 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Frankly, Tack, I think these folks like pain. It's not that they have been left behind. They chose it.
    2 Feb 2013, 10:31 PM Reply Like
  • thomasone
    , contributor
    Comments (87) | Send Message
     
    Yes, I have not forgotten that the same time i had margin calls most of my credit was yanked in a dishonest way. Now, they cannot get enough of my business. I don't use credit anymore except for mortgage
    2 Feb 2013, 11:47 PM Reply Like
  • thomasone
    , contributor
    Comments (87) | Send Message
     
    Yes inflation many places but not everywhere-there is a large section of the economy that are deflationary. Commercial appraisals are about half the fee of 25 years ago,.Its all about monopoly and you get that by having a political lobby. That is why political donations are @all time high
    2 Feb 2013, 11:49 PM Reply Like
  • anonymous#12
    , contributor
    Comments (552) | Send Message
     
    Tack, there is one guy here that lost his home in 2008. He keeps ranting of a hyperinflation collapse.....LOL!

     

    These doomers missed one of the greatest rallies in our history. Is impossible for them to accept the US economy is recovering; it would show their incompetence administrating their finances.
    3 Feb 2013, 07:17 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Macro:

     

    Who said ALL Americans are heavily indebted?
    3 Feb 2013, 10:43 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Macro:

     

    Your immature sarcasm aside I think you may wish to look at how many cars sold during the 2008-2009 crisis. In the meantime cars get old and MUST be replaced. Hence the jump in sales last year. Its called catch-up NOT recovery.

     

    Now let's see if you can respond like an adult and not like a 13 year old.
    3 Feb 2013, 10:45 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Macro:

     

    Gas is more expensive NOW than when your hero Hussein took office in 2009.

     

    That is called inflation...look it up.

     

    Educated adults realize that housing doesn't have to be at its highest point ever right now for there to be inflation in the price of home building materials.

     

    Yeah, food prices aren't very important to American families...that makes tons of sense, buddy.

     

    Bernanke would disagree with you about stock and bond price inflation but I'm sure you have a doctorate in economics from MIT too, right?

     

    Regarding your other "counterpoints" your hero Paul Krugman would be proud of your ability to skirt the issue and ignore the facts.
    3 Feb 2013, 10:46 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    DVL, you seem very agitated. We cannot continue this discussion till you calm down.

     

    I understand that you are very angry with Obama. But don't let your anger influence your investing decisions. There is a reason why Republicans keep losing elections. This Hussein nonsense is one of the reasons. How many more elections do you guys plan to lose before you realize that conspiracy theories are no substitute for sound thinking?
    3 Feb 2013, 11:21 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Macro, I am not agitated...I am correct.

     

    I'm no more angry with Obama than I was with Bush.

     

    Hussein is his actual given name so what is the problem?

     

    Who are "you guys"? People who question the "infallibility" of Obama?
    4 Feb 2013, 03:29 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    The healing can only start when you admit that you are angry.
    4 Feb 2013, 08:34 PM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    DVL

     

    "Macro, I am not agitated...I am correct. "

     

    You are encountering a common tactic you see among the coercives and pro-tryanny types. Alsinky has it as rule number 5. Its the ridicule tactic. Whenever you see it appear, it measn the coercives and pro-tryanny crowd have run out of misdirections and are worried the truth is coming out. Take it as validation that you are on the right track.
    5 Feb 2013, 06:37 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Macro,

     

    Whatever, dude.
    5 Feb 2013, 07:57 AM Reply Like
  • DeepValueLover
    , contributor
    Comments (8135) | Send Message
     
    Exactly, jhooper.
    5 Feb 2013, 07:58 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    JH, You may be on to something here. If people agree with you, then of course you are right. If they don't, then clearly they have run out of misdirections, and of course you are right. Bottom line, you are right.

     

    This is what happens when people get their education from Google.
    5 Feb 2013, 08:06 AM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    DVL

     

    See what I mean.

     

    Disagreeing and seeking truth are not the hallmarks of tyrants. Tyrants are thieves and rapists, and quelling dissent is the same reason the rapists clamps his hand over the victim's mouth. When Napoleon took over France there were 83 newspapers in Paris, in the span of a few years, that number had dropped to 4. What's really interesting, is that the drive to quell dissent starts in schools. The universities are the biggest culprits. The place where you would think a diversity of ideas and thus a love of free speech would be most prized is the place where it is most hated. This goes to show that a blind faith in a "formal" education is more about fundatmental dogmatism than it is about truth.

     

    Check out these guys. They provide great insight into the hypocrisy of higher education.

     

    http://bit.ly/VGw0du
    5 Feb 2013, 08:52 AM Reply Like
  • Rousseau SC
    , contributor
    Comments (284) | Send Message
     
    G. E. Moore once stated that every other generation should be excluded from institutions of higher learning so that freedom of thought might be protected. That was pre-google.
    5 Feb 2013, 09:14 AM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Love this comment thread.

     

    Biggest loss in the USA the past decade has been the lack of diversity in discussing ideas. It just seems as if polarization and "my way or the highway" has been the norm rather than encouraging differing viewpoints to come up with an intelligent angle that's best for everyone.

     

    You notice this as soon as you talk with the Europeans or even sift through their media sources, the difference is night and day. (pun intended).

     

    Dare I even say RT presents a more balanced view than our own?

     

    Best doesn't have to be perfect, and intelligent discussion from all angles isn't mutually exclusive to being decisive.

     

    Sorry for tangent, I just thought this was an excellent side discussion going.
    5 Feb 2013, 01:31 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Where would education be without alternative theories of everything posted in some blog somewhere?
    5 Feb 2013, 07:41 PM Reply Like
  • Covingtonium
    , contributor
    Comments (395) | Send Message
     
    Well, to further that logic, the "empire failing" would be the US dollar regime. Thus, the USD will fall in value, at some point in time.
    11 Feb 2013, 08:46 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    At some point in time being key. That time may be tmrw, or may be in 500 years. Which means no one can invest based on a claim that at some time the USD will fall.
    11 Feb 2013, 09:00 PM Reply Like
  • CaladesiKid2
    , contributor
    Comments (271) | Send Message
     
    Now that the preponderance of sentiment is bullish, the prudent may consider contrarian alternatives. However, two variables confuse the issue: 1. how much is this unrelenting QE affecting previously normal investing cycles? and 2. how much is government influenced 'seasonal adjustments' affecting economic reporting? Is this time really 'different' or will time tested, prudent economic factors ultimately overwhelm all this apparent manipulation? Interesting times.
    2 Feb 2013, 10:02 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    QE is the only thing we bulls have going for us. The rest is just noise. So I think we will be fine till 2015. Then we can short.
    2 Feb 2013, 10:03 AM Reply Like
  • Petrarch
    , contributor
    Comments (629) | Send Message
     
    creadit where it's due. they picked it better than most and that includes the vast majority of the SA crowd

     

    P
    2 Feb 2013, 10:14 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Thank goodness for the SA crowd then.
    2 Feb 2013, 10:17 AM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    There not right! Do you know why people are going into bonds? Retirees are tired of seeing banks offer .25 on CD rates and money market funds giving them NOTHING. I just don't understand why this is so effing hard to figure out why bonds continue to go up. There's a lot of retirees who are cash machines and they will gladly take 1.5% on treasuries over banks CDs. Also these retirees are hardly the types who will jump into stocks that are paying high yield as they still remember what happened in 2008.
    2 Feb 2013, 10:24 AM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    red:

     

    The folks doing this are dumb and dumber. Yeah, they learned a great lesson in 2008: if you fall off a horse, never get on one, again. Except that you can't make (even keep) any money or protect purchasing power doing that.

     

    At the historic low rates, now, a facet of bond investing, called "convexity," about which these good folks are equally ignorant, will cause them predictable pain when they discover they can lose a year or two's worth of yield in a week, just from price changes. The funny thing is that, if they don't know what they're doing (and they don't), they're better off in cash and 0.25% than moving to bonds, where the odds of actually losing money are disproportionately high, now.
    2 Feb 2013, 11:31 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Tack, I have a problem with you, and I think I should make it public. You write great comments, but they are lost in stocktalk. The convexity point that you made? Spot on, so write an article on that. Think of it as public service.

     

    If you don't, I will. :-) You have been warned.
    2 Feb 2013, 11:42 AM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    They don't care. Historically treasuries have rarely lost money for investors...might not make a lot of money but they do provide returns. Typically they don't need the money but want something in return even if it is small. I just find it humorus that the market thinks these type of people will switch over to high yielding stocks which for the vast majority don't like the volatility or the risk.
    2 Feb 2013, 11:44 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    They will, once they have a 10% drop in their portfolio.
    2 Feb 2013, 11:47 AM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    Mac:

     

    I am not an author, nor do I have a product or service to hawk, as many authors here in SA do. Therefore, and because I am busy with many other aspects of my investing and personal life, I chose not to write articles, even though I have been encouraged numerous times by SA editors. Therefore, whatever "pearls of wisdom" readers may garner will have to be confined to commentary.

     

    As for bond convexity, or any other topic, the beauty of the Internet Age is that even the most lethargic can obtain answers to their curiosity with the mere flick of their index finger: http://bit.ly/yiP0gR
    2 Feb 2013, 11:55 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I hear you. I am semi-retired about to be fully retired soon from my ill-gotten gains, and this is a nice distraction for me. but I don't think most SA readers even know that bond prices move inversely to yields. So forget the rest.
    2 Feb 2013, 11:59 AM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    Mac:

     

    As you have suggested in other posts, wait until they make the discovery. Then, the fun will really begin.
    2 Feb 2013, 12:05 PM Reply Like
  • pkvanwinkle@yahoo.com
    , contributor
    Comments (27) | Send Message
     
    Well, there is one thing you didn't factor in about "retirees". They are mostly old! I don't say that to be funny..I am 71! I say it because their "memories" go back further than 2008.

     

    They remember the 2000 (and '07) Eguity crash, and perhaps the '87 one and even '69.... All biggies! What I do not understand, is if they remember those so well, why don't they realize the markets total return over even shorter periods of time seem to consistantly give investors 8, 9, 10% and more a year

     

    Some one said to me recently..."I wouldn't touch the market now...look how it is flat since 2000!". I asked them if they believed that the S&P 500's total return since 1997 was 8.8%? They said no way!

     

    Depending on the size of a retirees investment account even at age 70, like me I would have 70% or more in stocks, with the balance in safe cash. That 70% will return 9-12% on average for the next 20-30 years...they can peel off a little every time the market gets ahead of itself.....and they should be fine!

     

    QE, inflation, famine, debt, recession, depression, wars, "the worlds gonna end tomorrow", we've seen it all! And stocks keep chugging along. Now, you want to play around, get the Brazilian ETF, (EWZ??) so when the Olympics come this summer maybe the herd will jump into that!!
    2 Feb 2013, 02:19 PM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    Totally different subject. You are equating retirement accounts with what I'm trying to tell others about NON-RETIREMENT accounts. Older investors (that are cash machines) are putting money into bonds like Treasuries or Muni's because of what CD's and Money Markets are paying these days. That's what people on Wall Street don't get and quite frankly they don't seem to want to understand. This so called "bond bubble" has been pointed out for nearly five years since the FED started raking over the banking rates.
    2 Feb 2013, 05:16 PM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    red:

     

    You think these people, doing what you contend, are somehow astute? They're doing it, if that's what's happening, because they want more yield, but are "scared" of stocks. They can only remember 2008, but forget why 2008 happened and somehow think it can happen again, spontaneously, at a moment's notice and for no identifiable cause. It doesn't work that way.

     

    On the bond side, when rates are 1-2%, you don't need to have much or a downward move at all to wipe out years of interest. The perceived "safety" of bonds is all illusory at today's yields. Prices might not collapse overnight, like the 2008 equity implosion, but the bleeding is likely to be slow and continuous.

     

    If the "frogs" don't jump out of the pan at some point, they'll be just as boiled, as if they'd been flash fried quickly.
    2 Feb 2013, 05:26 PM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    A $10,000 investment ten years ago in the JP Morgan Govt Bond Fund (OGGAX) returned 5.12% return while the S&P Total Return produced a 7.10%. Even in the last five years this bond fund has returned 6.23% which isn't too bad in a non-retirement account. These figures are from a period of Jan '02-Dec '12 and Jan '07-Dec '12. Factor in the lack of volatility and I can see why people still use these type of investments.
    2 Feb 2013, 10:48 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    I second the motion for Tack to write, though I know it take a ton of time to get an article going, so just wanna say thanks Tack for all the input you've put into the comments, I know I have learned a ton over the past few years.
    3 Feb 2013, 03:21 AM Reply Like
  • pkvanwinkle@yahoo.com
    , contributor
    Comments (27) | Send Message
     
    Totally different subject????
    And I quote: "Retirees are tired of seeing banks offer .25 on CD rates and money market funds giving them NOTHING. I just don't understand why this is so effing hard to figure out why bonds continue to go up. There's a lot of retirees who are cash machines and they will gladly take 1.5% on treasuries over banks CDs. Also these retirees are hardly the types who will jump into stocks that are paying high yield as they still remember what happened in
    2008." You just wrote that above!!!

     

    Most retirees that we are talking about have IRA's as well as non-retirement (or what we call agency accounts). I agree with Tack below, these investors (retirees or others) are still scared of stocks.

     

    As I read these various notes, I am amazed at how little confidence there is in the total return from stocks. This will be true until a significant time goes by with stocks doing well.

     

    I wish I could see the "comments" like ours here, but written in 1997,8,9 and even early 2000! Today, they are negative, back then they were positive...as someone said hereabouts "this time it's different..look out!

     

    back then, my firm, a major Inv. Managment firm, never got bearish...even when P/E's rose to 25-29 times forward earnings! Instead they turned to fund of fund hedge funds to "enhance" their expected returns! And the market plunged 58%!!

     

    No, lots of this talk about inflation, fed policy, domestic economic rates of growth, are just smoke screens (not intentional!) that often hide the underpinnings of future stock prices, which more and more are based on Global economic growth (as opposed to just the U.S.) as well as investor sentiment, (p/e multiples?...etc) and what I also look at...long term charts and trends.
    3 Feb 2013, 10:00 AM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    I see it everyday in how people invest and risk tolerance from retirement accounts to non-retirement accounts. You telling me you treat your non-retirement accounts the same way as your retirement? That's all I'm trying to point out but most people cannot and will not separate the two. In some aspects holding stocks can be tax inefficient for retires.
    3 Feb 2013, 10:07 AM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    DB:

     

    Thank you for the thoughtful comment. I am pleased to contribute.
    3 Feb 2013, 10:08 AM Reply Like
  • suryan
    , contributor
    Comments (174) | Send Message
     
    Macro investor while I have been in your camp all along and agree with what ur suggesting, there is some traction in the USA manufacturing industry. Wsj yesterday reported how cheap Nat gas is helping bring back dead industry back to USA and how companies that ran to china realize doing buisness there is not just worth the risk as local competitions seems to easily beat foreign companies. I see this as a sign that the USA is lumbering along fine
    2 Feb 2013, 10:26 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I think you are right but I just don't want financial journalists on my side. It's a bad sign.
    2 Feb 2013, 10:31 AM Reply Like
  • wyostocks
    , contributor
    Comments (7612) | Send Message
     
    You do realize that these "experts" are all salespeople selling the reader what they peddle, don't you?
    2 Feb 2013, 10:27 AM Reply Like
  • marketwatcher23
    , contributor
    Comments (935) | Send Message
     
    Macro sometimes you make a lot of sense. Maybe it is when you are off the gold threads.
    2 Feb 2013, 10:49 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    You mean, I make a lot of sense when you agree with me, and no sense whatsoever when you disagree? My teenage child thinks the same.
    2 Feb 2013, 10:55 AM Reply Like
  • marketwatcher23
    , contributor
    Comments (935) | Send Message
     
    I mean when you are not trolling gold threads. I know you think you are just disagreeing. But let's call it what it is.
    2 Feb 2013, 06:41 PM Reply Like
  • Mike Leiden
    , contributor
    Comments (19) | Send Message
     
    Democratic Inflation, get to know it, and understand it. It will make or break you within this decade.
    2 Feb 2013, 10:53 AM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I would rather have it make me and break gold bugs.
    2 Feb 2013, 10:55 AM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    By the way it's also nice to know that Barron's, CNBC, Bloomberg and others missed the bond bullmarket going on since 2008.
    2 Feb 2013, 11:05 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    This complete confidence in only positive benefits from continuing QE infinity is what really concerns me. Whatever the worry might be; the answer is always " there is QE". Price; valuations; --- someone on CNBC literally said --- "an earnings slowdown is not a concern; as there is QE".

     

    Earnings don't matter?

     

    Complete complacency about unintended side effects; which I define as rising inflation expectations from the greatest experiment in financial history.

     

    What happens when this overriding confidence in QE is questioned?
    2 Feb 2013, 12:08 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I am not ignoring the unintended side effects at all. I will short the market when those show up and the Fed withdraws QE. The goal is to make money both up and down, right?
    2 Feb 2013, 12:11 PM Reply Like
  • wyostocks
    , contributor
    Comments (7612) | Send Message
     
    MI
    Agree totally. The problem is when. Stay nimble and make money.
    2 Feb 2013, 12:38 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I can tell you when.

     

    When QEternity ends.

     

    And it will end, sometime. Then we short.
    2 Feb 2013, 01:05 PM Reply Like
  • tawse57
    , contributor
    Comments (716) | Send Message
     
    When the Fed announces no more QE it will be too late to short the markets - the markets will have crashed within that instant.
    2 Feb 2013, 03:20 PM Reply Like
  • bargor24
    , contributor
    Comments (21) | Send Message
     
    The stock market, bond market, and housing are now addicted to QE. It can't be withdrawn without bringing on economic seizures, so we're trapped on the road to hyperinflation.
    2 Feb 2013, 03:27 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Crashed within that instant to 0? Guys, come on. Let's keep it real here. We are all adults, right?

     

    Have you guys never lived through a interest rate hike? I have. It doesn't work that way. Many folks believe they know more than the Fed and the market actually keeps going up even after the Fed announces that ti is getting serious about draining economy. You get posts from people who claim that the market is more powerful than the Fed. Then the drop comes.
    2 Feb 2013, 04:07 PM Reply Like
  • wyostocks
    , contributor
    Comments (7612) | Send Message
     
    tawse57
    Especially if the Fed tips off the Wall Streeters before the little guy hears about it.
    2 Feb 2013, 04:09 PM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    When QE ends? Really which country? Good luck as Japan, Euro and others are doing the same.
    2 Feb 2013, 05:19 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Good point. It may not end for a LOOOONG time.
    2 Feb 2013, 05:19 PM Reply Like
  • wmateri
    , contributor
    Comments (517) | Send Message
     
    Macro said: "It may not end for a LOOOONG time." I would add that it probably won't end all at once either as that would be catastrophic to the addict we all know and love as "the market." So how will the Fed ease out of Quantitative Easing? Is there a magic rate at which the market (sorry, the economy) can be kept afloat while they back out of their very deep hole?
    2 Feb 2013, 06:13 PM Reply Like
  • Uncle Pie
    , contributor
    Comments (2665) | Send Message
     
    Mr. Trennert's assertion that institutions are "only 27%" in stocks is almost certainly wrong. Most institutions, following the lead of David Swenson at Yale, are very heavily in hedge funds, and the hedge funds are almost always highly leveraged. Last time I looked, Yale's endowment was 2/3rds in hedge funds and LBO funds. (euphemistically branded as "absolute return" and "private equity" respectively). So the institution might appear to be 27% in stocks, but when you take into account the levered positions in the hedge funds, the actual allocation to equities might be 127% or 227% or who knows what. It's not disclosed.
    2 Feb 2013, 12:40 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    Exactly; UP. MI; as for the now - popular strategy of playing the QE bandwagon until there is a clear moment when the music stops --- I am reading this strategy all over the place; BTW -- then gently stepping off before everyone else -- sorry its never that clear; nor that easy. At least not in my experience.

     

    Everyone; in my view; is playing that same tune -- the one that goes; "we know its a liquidity driven bubble; everyone is dancing to it; so we will too; but we'll know when to get off".

     

    Everyone thinks they'll get out in time. The story never changes.

     

    With a market this exposed; it will likely hammer the longs when least expected; and the one narrow door will not let most out unscathed. Way too many bulls. No anxiety; no healthy wall of worry. Not good.
    2 Feb 2013, 01:01 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Macrotrader, Others are smarter than me, but I have one advantage over them. I am dumb. That's a huge advantage, in that I will for sure miss the top and lose money in the first stages of the drop. But then I will know straight from the horse's mouth - the Feds - that QE is gone. Then I will short. Many others will try to get out before the top and end up shorting a rising market. I see a lot of pain in their future, while limited pain in mine. The beauty is, the Fed tells you when QE starts and will tell you when it will end.
    2 Feb 2013, 01:09 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    Wrong. The Fed will not tell you.

     

    The market will discipline the Fed. The Fed is not bigger than the market; although that is the belief out there. History tells otherwise.

     

    And if I'm right; that first drop will be a real whopper; as well.
    2 Feb 2013, 01:26 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    This is where you and I disagree. This is a fundamental difference. I believe the Fed runs the market, and market doesn't run the Fed. There is no way for us to resolve this because it is a fundamental difference in opinion. When I was younger and less cynical, I used to believe, like you, that the market is bigger than the Fed.

     

    It isn't.
    2 Feb 2013, 01:37 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Macro Investor
    I agree with you because I went through the same transformational change but I think that when the next event like 2007-2008 takes place, the markets will truly take control since the Fed and government have not solved anything.
    2 Feb 2013, 05:52 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Dude, I have heard this so many times from the market mavens. Next time, just wait, the market will take the Fed to the woodshed. Yet, it is always the Fed that's got the market vigilantes over the knee.

     

    I am sure this time is different.
    2 Feb 2013, 06:39 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Yes, it will be very different next time because things are far worst; Wall Street had to be bailed out with only $250B-$300B subprime mortgages going bad and now there are $ trillions of IRS and whatever bonds the Fed is buying every month; there are more $ Ts of derivatives that the big banks own and the taxpayers will have to bailout; plus the big banks are shorting gold and silver 100:1; if these are not good enough reasons to be different for people to say enough is enough, then the people deserve what's coming
    2 Feb 2013, 11:33 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    OK, got it. This time it's different. That's your investment thesis.

     

    Wow! If I ever got a penny for every time I heard someone say that this time it's different ...
    2 Feb 2013, 11:40 PM Reply Like
  • bargor24
    , contributor
    Comments (21) | Send Message
     
    Jeez, maybe you'd like a penny for every who laughed at building in the flood plain along the northeast coast - there's never been a flood in most people's living memory. Sandy WAS different. And this time the economy IS different because there has never been debt like this before, nor has there ever been money manufacturing like this before (except for Germany, Zimbabwe, Brazil). We've turned the hot water on full blast and stepped into the shower, but so far the water is still tepid. We're going to get scalded.
    3 Feb 2013, 09:06 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    The 1% and people with inside information will not get scalded
    3 Feb 2013, 10:35 AM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    Wow. Its all I can say.

     

    Total outstanding debt is 16.5 trillion. The fed will step up to buy it all?
    2 Feb 2013, 01:53 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    If it so wishes, sure. It won't need to, of course. The economy will improve, tax revenues will go up, and we will start paying the debt off as we did in the 1990s.
    2 Feb 2013, 05:16 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    This is not the 1990's. Organic growth was strong then due to favorable demographics.

     

    Now there is no growth. It is a currency war. What I dont get, is why china and japan continue to hold treasuries in a country both fiscally irresponsible and a currency manipulator.
    2 Feb 2013, 05:36 PM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    Mac:

     

    The answer to your question is quite simple. China and Japan, even more so, live for exports. You think either one would take an action to devalue the currency of their greatest trading partner? Why do you think the Chinese are completely unwilling to allow the yuan to float? Why do you think the Japanese are desperate to increase the money supply and drive down the yen. Even the Chinese have been printing up a storm.

     

    If these countries casted a vote of no confidence in the U.S., they'd be signing their own death sentences.
    2 Feb 2013, 05:52 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    I predict, when the currency wars end up in a stalemate, then trade wars will become more overt. We are drawing closer to that day.

     

    At present the loser is the euro. You think they are happy about things across the pond, that there will be no effect?

     

    The bulls would say, "buy japan because of the weaker yen"

     

    Also "buy Europe as the strong euro says crisis over"

     

    Fools.
    2 Feb 2013, 06:14 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    Favorable demographics macrotrader? Did you per chance miss the inflation wave lately? We can solve the demographic problem very easily by opening hours doors and ringing a bell. Ok, scratch that. No need to ring a bell.

     

    I don;t understand why you don't get it that China and Japan continues to hold Treasuries. They are export based economies. They need a weak currency. Why would they want to dump Treasuries and make their own currencies strong? They are not masochists, right?
    2 Feb 2013, 06:41 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    The Euro guys will indeed be the losers if they do not take steps to weaken the Euro. But because of the strong German influence and the history of hyperinflation, I suspect it will be hard for the ECB to make the right call for the people.
    2 Feb 2013, 06:43 PM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    "tax revenues will go up, and we will start paying the debt off as we did in the 1990s. "

     

    That's not a good thing, its a bad thing.
    2 Feb 2013, 07:57 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    OK, then we will not pay off the debt. We will use the increased tax revenue to massively expand the social safety net. Your preference, Sir?
    2 Feb 2013, 07:58 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Whose death sentence? US or China/Japan? In the case with Japan, we nuked them and its our lapdog; with China is a different ball game that the US is losing; China by holding US T-bonds got us by the cajones; I know, I know we got more nukes but China has nukes too; China is buying resources around the world while Japan bought expensive golf courses and US real estate; China thinks for the long term while US consumes its way in a debt spiral vortex; yes, China is printing also but it allows its people to buy silver and gold as currency protection while in the US people are selling theirs; I am interested to see the outcomes
    3 Feb 2013, 11:10 AM Reply Like
  • Tack
    , contributor
    Comments (12704) | Send Message
     
    Rin:

     

    I am afraid your idea of exertion of power or influence is distorted.

     

    The Chinese hold no power whatsoever over the U.S. by holding its bonds. They can make no demands; they have no collateral; they cannot accelerate maturities; they cannot foreclose. And, they can't use military hegemony to threaten or cajole the U.S., either. All they can do is assume they will get their interest and principal, as contracted.

     

    Furthermore, if they wish to sell their bonds, there will be other buyers, or even the fed, itself, as it's filly capable of buying Treasuries, at will, and does. And, even if China decided to dump the bonds unceremoniously and it caused any meaningful diminution in the value of the U.S. dollar, they would simply be aiming a pistol right at their own foot. They are literally desperate for exports to the U.S., so that's precisely why they won't allow the yuan to float and why they would never take any rash actions on our Treasuries.

     

    And, the idea that China somehow sees itself or its citizens fortified by hoarding gold is almost too ludicrous for comment. If the U.S. currency and trade collapsed, China would be plunge dinto a major depression and political turmoil the likes of which they can -- even if some here can't -- imagine. All that gold wouldn't count for much unless they could eat it.

     

    It's really become popular recently, inside the U.S., to look at the U.S. as a weak, fallen giant, which can't compete and is held aloft by bailing wire and bubble gum; to consider that the U.S. somehow owes its existence to the polite tolerance of China. The truth of the matter is that the U.S. produces more than China, Japan and Germany, combined, and the country is seen as the world's safest and most desirable place to invest and to bank capital. That's why in each and every global crisis, small or large, money floods into U.S. Government bonds and the dollar rises.

     

    China's ability to sustain itself, internally, is very precarious. It's not China that could cause havoc for the U.S., but the reverse, if we were ever so inclined. Fortunately, presently, neither party seems intent on doing anything stupid.
    3 Feb 2013, 11:52 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    I think you missed the whole point; China is the largest creditor country and the US is the greatest debtor country that the world has ever known; give me the name of a country that has survived such situations....England? look at them today even after the iron fist lady; what is the US producing? supersize big Macs at minimum wages and $Trillions of junk mortgages bonds that screwed up the financial system; come on, we were able to do better!! as for China, it has done an excellent job in growth but have some problems and at the same time has the cash to address issues; their people are willing to work for next to nothing like the people in the US during the depression; by the way the % of China's exports to US has gone down; we got stop being addicted to cheap imports
    3 Feb 2013, 01:25 PM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    "We will use the increased tax revenue to massively expand the social safety net. Your preference, Sir? "

     

    That will just make our paper less attractive. If expropriation taxes go up, then you cut expropriation taxes even more. The next thing you would have to do during this time, is give gov regulators less and less to do. The less they are doing, the more productive our economy will become. The growth in economic opportunities will then move people out of the dangerous, unstainable gov subsidized consumption scheme, into the always reliable true productive scheme. As unemployment starts to go down, then you start to put caps on the social safety hammock. This would allow for an orderly transition from the downward spiral that the growth in the unproductive creates, to the ever sustainable growth in the increasing might of the productive. As the relation of notes to our productivity increases, you can issue more notes and their will be a demand for them because they claim on the labor they represent(in this case a claim on US labor) will be a claim that grows in value even though the note creation is growing in number. Its the same concept as a stock. In order to expand the company can issue notes if their is a high demand for those notes and then increase productivity without diluting the notes. Producitivity goes up and notes go up.

     

    Your plan is basically increase notes and decrease productivity. Nature will slap you down for such violation of her laws.
    3 Feb 2013, 01:36 PM Reply Like
  • Rousseau SC
    , contributor
    Comments (284) | Send Message
     
    Whose economy will improve? How is ti possible for the economy to improve for the middle class? The trend is greater concentration of wealth, greater numbers of adults dependent on govt programs, lessening numbers of full-time workers in the private sector, lower wages in the private sector, increased govt burden on decreasing numbers of private sector workers making less income. Where is the source of economic improvement which will allegeldy add to the tax basis?
    3 Feb 2013, 02:00 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    "Nature will slap you down for such violation of her laws. "

     

    You know JH, for such a nature lover as yourself, I wonder how you would do in the pre-historic times. That's really where all conservatives belong anyway. I would like to see whether they would be able to kill, or whether they would get killed.

     

    Nature's law, of course.
    3 Feb 2013, 02:21 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    There is no way for the economy to improve for the middle class till we bring back unions, which, incidentally, we are not going to do.
    3 Feb 2013, 02:21 PM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    "I would like to see whether they would be able to kill, or whether they would get killed."

     

    Conserative is a relative term. Do you know where the terms for "Left and Right" originated?

     

    Nature doesn't care about good intentions or bragging about how smart you claim to be. It only cares about physical laws. You can utilize them or ignore them at your peril. You seem to have chosen the latter since your arguments are devloving into demonizing instead of discussing. Its a sign of frustration and fear.
    3 Feb 2013, 03:32 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    I agree JH. I defy natural law every single minute in my life. I live in a climate controlled house and not in a cave. I eat processed food produced far away rather than eating what I kill with my bare hands. I have modern medicines that allow me to live far beyond what nature would have allowed.

     

    It's called progress. I like it this way.
    3 Feb 2013, 04:06 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    The Euro is in much better shape then the US$ for the following: 1- Europe is not fighting in forever wars,2- their defense budgets is minimal, 3- gov't can't print, 4- have a trade surplus, and 5- all manufacturing not exported; comparing to US is not fair; we are in better shape because of our privileges of world currency and the world has no choice but to accept devalued $$; but these days are numbered.
    3 Feb 2013, 04:21 PM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    "I defy natural law every single minute in my life."

     

    Yeah, that's just my point. You are using natural law to your advantage. All those advancements are examples of price sensitivity activity. Price sensitive activity is part of nature's law. Places that make themselves blind to prices via coecerion like N Korea, Greece, Cuba, etc have very poor standards of living. It is being sensitive to prices via having to learn from your mistakes that increases your standard of living.

     

    The more you introduce coercion into your markets the more price blind you become and the progress which has so greatly improved your standard of living begins to slow down, and when places like N Korea or Cuba are allowing the self proclaimed "smartest" to run everything, the progress can come to a virtual stand still.

     

    The reason you like it, is because consumption feels good. As such, you should use your reason and figure out how you can get even more of it. That should reveal to you that production is the highest goal of mankind, thus we want to do everything we can to promote production. That's why we invented gov. So we could have an entity that we could grant the use of force to, and that entity would protect us from force. Being free from force (that is, when we have freedom), would mean we have to learn from our mistakes and we can only transact via voluntary cooperation. Such a condition makes you as price sensitive as you can possibly, you are sensitive to nature's laws, and that's what makes you as productive as possible, and that's where progress comes from.
    3 Feb 2013, 04:47 PM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    "but these days are numbered. "

     

    What's the saying, "things that can't go on forever, don't."?
    3 Feb 2013, 04:48 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    OK we agree on something.....what about on Super Bowl ...I pick on 49s
    3 Feb 2013, 05:14 PM Reply Like
  • jhooper
    , contributor
    Comments (5323) | Send Message
     
    Who are they playing?
    3 Feb 2013, 06:11 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Baltimore Ravens ...49s are getting their butts kicked right now...one of my faults is I can pick a good stock but poor at picking a winning team
    3 Feb 2013, 08:20 PM Reply Like
  • markrpat
    , contributor
    Comments (197) | Send Message
     
    Wow......this is entertaining and educational at the same time. Thanks gentlemen, good comments and all done with humor and civility. Well done!

     

    Now I have to go and look up convexity.
    2 Feb 2013, 02:54 PM Reply Like
  • suryan
    , contributor
    Comments (174) | Send Message
     
    http://on.wsj.com/VF4slk- focuses on how these companies still find USA the best place to do buisness

     

    Another article how cheap Nat gas is bringing manufacturing to bayou

     

    All these show how the USA will make a turn around. I don't how naysayers and doomsday predictors hang on to their dollar death, end of USA stories. This country seems to get it right and do things that keep the wheels turning.

     

    The way I see it, the growth and increased revenue will bring down the deficit. Remember we are yelling about debt when our interest rates are its lowest, unlike other countries which yell about it after markets raise the rates.

     

    There are predictions that USA will become the Saudi Arabia by 2020 due to energy production. There is no way you can be bankrupt when you have assets that run the world. Yes the USA don't own these resources but companies do, they will pay taxes which will address the deficit.

     

    So the market may move up or down and people may cheer how they got the call right- long term- USA will lead the way for another generation. There are no two ways about it.
    2 Feb 2013, 03:05 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    suryan

     

    Please don't get too overconfident that this country will overcome all its economic challenges; it is exactly this attitude that got us in this mess; I have been waiting 30 years for things to get fixed but without holding my breath; with people messed up with drugs and not well educated, where is the future of this country? one more thing, England is broke again after being bailout by the North Sea oil for a couple decades, why would we be any different or smarter? hail to the Queen!! Don't forget, China might claim our nat gas and oil as a form interest payment or collateral.
    2 Feb 2013, 03:56 PM Reply Like
  • Archman Investor
    , contributor
    Comments (2350) | Send Message
     
    Attention:
    Calling all muppets. Calling all muppets.

     

    Since you did not buy when the S & P was 666....and no one wanted stocks..........

     

    So now its time mom and pop Americans to mortgage the house (again), sell the kids, drain the bank accounts (LOL oh wait...85% of Americans are broke anyway just pretending to "look" wealthy..oh well nothing to drain then)...
    and get out there and start buying stocks NOW. After they have been going up for 4 years.

     

    Typical Americans: sell it all at the bottom, buy it all after the market, the media, and Wall Street salespeople tell you its safe to buy..after a nice 150% run to the upside.

     

    I am fully invested in the market? Yes. As I have been since 1995.
    Do I sell core positions? No. Dividends get reinvested.. always.
    Do I put fresh money to work? Only in selected names.
    Do I love market crashes? Yes. Most Americans sell the crashes. I buy them and make money...always.
    Will most Americans once again get destroyed in the market? As always, like clockwork...yes. But don't worry though, they can buy Cramer's next book which will be called "Getting back to even..Part 2"
    2 Feb 2013, 04:43 PM Reply Like
  • Robert Duval
    , contributor
    Comments (2884) | Send Message
     
    Wall street. Whip and drive the muppets, I mean cattle.

     

    The shrill voices calling the public back in has been a scream this week. I'll bet even cnbc's ratings are rising!

     

    What a sales game. There is never anything new out there.
    2 Feb 2013, 05:14 PM Reply Like
  • JohntheOld
    , contributor
    Comments (162) | Send Message
     
    Thanks to all for your comments - been a long time since I have seen a large posting without any flames, trolls, and fools (excepting myself).
    Tend to agree with everything except the degree of bull fevor. Consider all the bear comments over last few years and the bulls have not 'yet' made as much foolish noise. Hope I have enough sense to not screw up another one.
    2 Feb 2013, 06:14 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    I don't waste any time on bulls and bears since I started investing 10 years ago; experts call it a bull market since their drops in 2007-2008 and their new highs now; I don't consider it a bull market since I don't see it in the economy improving; when I talk to people about markets. they tell me I am too bearish and I reply that I am a contrarian and judge all financial news with a grain of salt; this has helped me make money and preserve capital; for as long gov'ts print money, commodities will have a long, long bull market with corrections along
    3 Feb 2013, 12:12 AM Reply Like
  • sethmcs
    , contributor
    Comments (3067) | Send Message
     
    One truth that everyone misses. As the market goes higher so does risk. I takes an ever increasing amount of money to make it go higher still. I would prefer the market to fall back 5-10%. VIX to hit the mid 20s. The faster the better to elevate the over bought conditions so I can put some more money to work.
    2 Feb 2013, 06:16 PM Reply Like
  • Macro Investor
    , contributor
    Comments (8346) | Send Message
     
    So the market needs to fall so that you can put money to work - that's the truth everyone is missing?

     

    Did you send an email to the market letting the market know that it needs to take your considerations into account?
    2 Feb 2013, 06:44 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    Some history that bears a repeat: http://bit.ly/UNHE3x

     

    Mr. Cramer should be forced to listen to this speech repeatedly, CWO style, with charts of the failed dotcoms and the CRB/PM indexes superimposed.
    2 Feb 2013, 07:10 PM Reply Like
  • Venerability
    , contributor
    Comments (3048) | Send Message
     
    We are all for everybody in the Universe coming back to the Stock Market and its going up forever and ever.

     

    But "the 99 percent" are not coming back until the Stock Market is a far safer and more level playing field.

     

    They see things like Tiny Terror saying two months ago that beloved Apple was a "main determinant of GDP," and now saying it's a veritable dog, pig, dromedary, aardvark, which should be shunned.

     

    They see things like (silly) Facebook being relegated to the scrap heap a few weeks ago, suddenly being bought by George Soros and other Whales, and then spurting up magically by 99 percent or whatever.

     

    They see things like the entire PM sector being ground into dust to be swept into the latest Dyson contraption, at the same time China launches Gold and Silver ETFs to compete (strongly) with beloved GLD and SLV, and China is close to achieving its long-desired trifecta of being Number One in Gold production, Gold wholesale, and Gold retail.

     

    They see things like Tiny and the Fast Ninnies pumping the likes of Amazon with its 3,000 P/E - or thereabouts - while bashing Ford, after terrific earnings and much more to come.

     

    Or any of a zillion other examples.

     

    You want customers to come back to the Stock Market - deserve them!
    3 Feb 2013, 02:14 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Beloved GLD and SLV with unallocated physical gold and silver...be careful
    4 Feb 2013, 07:15 PM Reply Like
  • june1234
    , contributor
    Comments (2492) | Send Message
     
    With the fed pumping $1 trillion into the markets each year what mom and pop or anyone does or doesn't do is irrelevant.
    3 Feb 2013, 07:35 AM Reply Like
  • noregretstrader
    , contributor
    Comments (6) | Send Message
     
    If this is not a contrarian indicator, then I'm not sure what would qualify.

     

    From the cover: "Expect a breakthrough soon. Here's what happens after that."
    3 Feb 2013, 11:35 AM Reply Like
  • dkarousos
    , contributor
    Comments (93) | Send Message
     
    First, impressed by the caliber of comments on this thread. A few observations:
    --Retirees purchasing bonds right now to get better yields than money markets are not fools. They plan to hold their bonds to maturity and then reinvest. If they can triple the yield they would otherwise get, who cares if they are foregoing better returns in equities or if they see their bond portfolios marked down by rising interest rates. They only lose money if they don't hold until maturity. If they are doing this on a gradual basis, then I do think whoever said it above makes a great point explaining part of the bond bubble.
    -- I've come to the conclusion that QE3 has nothing, or very little to do with continuing to prop up the economy. Instead, I think the real purpose is to, ironically, try to prevent the next bubble crash (in bonds). How? Note that in this round, they've taken the unprecedented step of telling the market how much they're buying and for how long. That's not what you do when you're trying to encourage investment and consumption. Instead, you hide your intentions from the market so that they fear the party could end tomorrow and encourage them to borrow from the future to spend/invest today (which makes sense if economic activity is depressed/below capacity). Instead, what they're doing is telegraphing to the banks and other institutions who have been large purchasers of Treasuries to start, slowing, liquidating their bond portfolios--"don't worry, they say, we'll be here to mop them up". In truth, we shouldn't care because the Fed will just hold the bonds to maturity (lowering our deficits along the way). Otherwise, the crash in bonds could become the next big destabilizer that ruins banks' carefully reconstructed balance sheets (accomplished by the way, by means of these bonds in the first place).
    -- I don't mean to suggest this is diabolical. I think it's perfectly logical. I'm obviously not in the "Fed is evil" camp.
    3 Feb 2013, 11:56 AM Reply Like
  • redarrow5150
    , contributor
    Comments (976) | Send Message
     
    That would be my comment above. Also the FED keeps the interest rates (IMO) have nothing to do with Helicopter Ben's assertion of bringing down unemployment but keeping the banks solvent. The FED is giving literally buying banks purchase but more importantly time in cleaning out their balance sheets. I don't know how anybody in their right mind can look at camera or tell clients to buy a lot of these financial institutions. Trade the financials? Sure. Invest in the financials? Hell No!
    3 Feb 2013, 03:12 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Well I guess you have not heard of the $16T secret Fed bailout of the European banks and worldwide a few years ago or why WS insiders were informed of bailout plans days before; if that's not evil...well..
    3 Feb 2013, 03:53 PM Reply Like
  • suryan
    , contributor
    Comments (174) | Send Message
     
    I dont deny the big problems this country is facing, rising debt levels, lower take home pay, rising wealth discrepancy. The market has been rising and naysayers kept saying its going to crash again. All the reasons that are belted out have been belted out before. Good companies keep doing what they do best- just do their job.

     

    Market timing is never a good thing. People who invest based on market tops or bottom dont make money or create wealth. If you believe the economy to be a sapling after a forest fire, one has to be patient and nuture the sapling and plant more sapling. Yes sapling will die (companies go bust) the other ones will reap the fruits. The investor who stayed patient gets the fruit while the people who yell from the sidelines will just watch the yields enjoyed by the investor.

     

    Bottomline- in any market good companies will do always succeed. Hell we worry about our thousands invested, what do you think happens to companies that have billions at stake? So does it really matter what the debt level or the dollar crash is going to do? it surely is going to screw you if you are scared sh*tless.

     

    What companies are you following?
    3 Feb 2013, 10:07 PM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    The bottom line is that the markets don't correlate with the economy anymore; to give you an example when the economy did not grow or if unemployment was up, the markets went down but lately have gone up no matter what; so called experts have been calling the rising markets as bull markets; personally I call these markets bullish for the companies receiving a bailout only!
    The companies I have since I started investing about 10 years ago are MO, PM, KRFT, TNH and mutual funds in gold and oil; MO has been good to me since lawsuits settlement but I don't feel comfortable with it but not too many stocks are available for growth, pay high dividend, and management serves stockholders' interests; as long you don't overpay for a stock,you should be OK or just buy when markets go down; I missed out on buying last time markets went down but this won't happen next time; the long term is the best way but age matters; good luck!
    3 Feb 2013, 11:02 PM Reply Like
  • anonymous#12
    , contributor
    Comments (552) | Send Message
     
    "missed out on buying last time markets went down"....

     

    That's the reason you are screaming of doom everywhere.....

     

    Just like every doomer here on SA, they missed the rally.
    4 Feb 2013, 09:04 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Doom; I call it being contrarian my friend; I never had a losing year even when the markets went down; you call this a rally when markets are managed, trading volume is down and whatever volume is 50%-70% prop by WS banks (never lose money), and the economic growth present is because inflation is undercounted...you need to do some reading
    4 Feb 2013, 11:03 AM Reply Like
  • suryan
    , contributor
    Comments (174) | Send Message
     
    Companies like kinder morgan, yum, aptar, sysco(syy), disney, Unilever- to name a few will reward investors on long term. Good luck!
    4 Feb 2013, 07:29 AM Reply Like
  • Rinascimento
    , contributor
    Comments (1029) | Send Message
     
    Agree with you; if you are into emerging markets I recommend you read Breakout Nations by Ruchir Sharma; good luck
    4 Feb 2013, 06:38 PM Reply Like
  • WallStreetDebunker
    , contributor
    Comments (2261) | Send Message
     
    Another great example of Barron's working as a contrary indicator. There is no "great rotation". (Rotation is a bogus concept anyway.) As far as fund flows predicting market returns, that's another bogus idea debunked by academics long ago.

     

    Notice the "Great Rotation" since the Barron's piece:

     

    http://bit.ly/Z1YokW
    14 Mar 2013, 02:26 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|