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  • Painful Correction Underway [View instapost]
    Bearish sentiment plummeting, bullish sentiment high, macro data showing signs of beginning to roll over, zero interest in posts like this one (hence no comments except mine).


    I'd like to see a poke up through 1600, get the headlines and entice a few more folks, and then it could get quite interesting.
    Apr 10 06:06 PM | Likes Like |Link to Comment
  • Cash Hoards On The Sidelines And The Great Rotation: Old Myths Meet A New Reality [View article]
    I am incredulous that there are endless posts, such as the one above, from folks who've failed to grasp the very basic point made in this article.

    How hard can it be to understand that when you buy something, you get the seller's item and the seller ends up holding your cash, and there's exactly the same amount of cash in existence as there was before you transacted. I mean, come on folks.

    James must have the patience of a saint!
    Feb 17 12:58 PM | 5 Likes Like |Link to Comment
  • 2012 Review: Why Stocks Rose, Where I Was Wrong And What I Would Do Different [View article]
    You seem a smart guy, and likely someone who learns from mistakes. You analyzed the economic situation, proved to be correct on various aspects of your forecast, but were wrong on the only aspect that actually matters for investors: market direction.

    So, two possible takeaways from this...

    - Either: 1. In the future, analyze the situation *even better* so that next time an accurate forecast of market direction results;

    - Or: 2. Recognize the virtual impossibility of making such forecasts accurately on a repeatable basis, and direct your time and talents elsewhere.

    The logical takeaway is 2. The folks who say they do 1 are almost certainly simply artifacts of survivorship biases in sampling. And if they're not, but you cannot emulate them anyway (which the evidence suggests), then why waste your time and effort in trying to do so?

    Instead, construct an all-weather asset allocation mix, and relax. When markets get panicky or euphoric, tweak the allocation a little to snare a bit extra. If a special-sit develops that you understand, allocate a few percentage to take advantage. This way, you have potential to juice returns modestly that over time could compound, while not being exposed to making erroneous major market timing calls.

    Good luck.
    Jan 31 10:15 AM | 4 Likes Like |Link to Comment
  • Market Outlook: Unclear In Short Term; Down In The Long Term [View article]
    Keep up the interesting articles, Jeremy. Those awaiting valuations (ie entry points) that offer highly attractive long term equity returns will be rewarded, eventually. It may be six months, or much longer still.

    But Hussman's return projections, Shiller PEs, and GMO's asset class forecasts will all improve again eventually, and equity weightings can be upped. Until then, I trade a bit here, trade a bit there, bit largely I wait. Secular bears, and the trading ranges therein, will make fools out of most people, some of whom seem to appear here to knock your sensible, measured commentary.

    "Men who can be both right and sit tight are uncommon"
    Jul 1 09:05 AM | Likes Like |Link to Comment
  • S&P 500: Market Update [View article]
    Nice considered update, Jeremy.
    Apr 23 09:30 AM | 1 Like Like |Link to Comment
  • $5 Gas: Play It Again Sam [View article]
    Or to paraphrase Fran├žois Trahan, "Crude is the new Fed Funds rate".
    Mar 2 09:06 AM | 7 Likes Like |Link to Comment
  • Reduced Market Volume And Its Implications [View article]
    Ahh, the old "money on the sidelines" chestnut. That "ton of money" will always exist, and it's obvious really.

    Let's say we have two groups: Group A, currently all in cash, biting their fingernails at missing out on the rally; and Group B, 100% in stocks, relishing the recent boost to their portfolios courtesy of a 25% rally from Oct lows. And for simplification, lets say Group A's cash = Group B's total portfolio valuation.

    So Group A all decide to buy. To do so, they have to offer Group B enough cash to entice them to sell them their stocks. So let's say Group B decides that SPX at 1342 is plenty enough for them, so they sell all their stocks to Group A.

    What do we have?
    - Group A is now 100% in stocks.
    - Group B is 100% in cash.
    - The ownership of stocks has changed
    - The buying pressure has changed (Group A have no desire to buy anymore stocks - and indeed have no more cash to do so); while Group B also has no desire to buy any more stocks, as they were very happy to be selling theirs at SPX 1342.
    - The CASH ON THE SIDELINES IS EXACTLY THE SAME AS IT WAS BEFORE, just held by different people.

    The next time someone says the market will go up because of of "a mountain of cash on the sidelines", turn you back and walk away, as they're talking nonsense.
    Feb 6 06:05 AM | 1 Like Like |Link to Comment
  • The U.S. And Europe - An Update [View article]
    Jeremy, please keep writing these articles. This sort of logical, dispassionate analysis, absent of any drum-beating, is much appreciated in the "interesting" times in which we find ourselves.
    Jan 24 07:49 AM | 2 Likes Like |Link to Comment