VP of Common Sense's Comments

$59 Billion Dubai Debt Default Could Have Much Wider Implications

Fri, 27 Nov 2009 21:56:40 -0500

So, if this event leads to a significant strengthening of the dollar, which it appears it has, does that mean a rapid unwind of dollar carry trade positions? And then a decrease in US equity valuations?

Why a Market Crash Doesn’t Matter

Sun, 22 Nov 2009 16:57:55 -0500

Of course Peter Lynch found ten baggers in down markets, they aren't hard to find over the past 9 months!

Bill Gross: Anything But 0.01%

Sun, 22 Nov 2009 16:44:15 -0500

"New Normal"... Is that like the "new" business model of dot-com bubble internet stocks?

Global Markets in Review: Share Prices Too Far Ahead of Economic Reality

Sun, 22 Nov 2009 16:28:05 -0500

I haven't looked, but isn't this the 3rd or 4th time Pierre has written some version of this article?

Employment Lags the Stock Market

Sun, 08 Nov 2009 20:14:46 -0500

The leading statement was that unemployment lags the stock market, the quote you cited discusses the link between unemployment and the end of the recession (ie. GDP).

That would be apples to oranges my friends.

On Nov 08 10:02 AM logicalthought wrote:

> >>There is really no debate about the point that unemployment levels
> lag the stock market.<<
>
> I refer you to last week's Wall Street Journal:
>
> "The time-worn Wall Street gospel is that employment is a lagging
> indicator, but that isn't always so. It has only lagged significantly
> in the recoveries that followed the past two recessions. In the eight
> recessions between World War II and 1982, payrolls bottomed and unemployment
> peaked, on average, less than one and two months, respectively, after
> the recessions ended. Assuming, as most economists do, that the latest
> recession technically ended in June 2009, this recovery already is
> looking jobless."
>
> online.wsj.com/article...

Trading Week Outlook: November 8 - 13, 2009

Sun, 08 Nov 2009 20:08:52 -0500

There doesn't appear to be a whole lot of news/earnings this week in the USA. So the market will continue to trade on sentiment, meaning I think it will go up a bit more...

Dollar's Decline Has Contributed to Market's Recent 'Rise'

Thu, 05 Nov 2009 21:49:04 -0500

My opinion is that we are right on the threshold of equities being overpriced. So we may go up another 10%, or not, in the short term, but we will go either sideways or down over the next 3-6 months.

Are Markets Hitting the Ceiling?

Sun, 25 Oct 2009 22:43:59 -0400

I prefer to keep an eye on P/E, specifically in terms of valuation. Right now I see a moderate to strong P with a very weak E, aka 21 or so on the S&P. In plain english, I think valuations have been bid up to an unsustainable level.

On Oct 25 02:16 PM TradingHelpDesk wrote:

> Earnings don’t drive stock prices nearly as much as sentiment does
> so I am paying less attention to Q3 earnings and lot more attention
> to the sentiment on this site, which is as good a proxy as any for
> shifting sentiment.
>
> But that’s not to say earnings don’t matter. When earnings give investors
> a rising sense of confidence, they can be a powerful indicator of
> a sharp drop in market 1-2 quarters later. This was certainly true
> in 2000. Peak earnings coincided with the stock market’s all-time
> high and stayed strong right through the third quarter before finally
> succumbing to the bear market in stock prices. Investors who bought
> stocks based on strong earnings (and the trend of higher earnings)
> got killed.
>
> elliottwave.com/r....

Is Stock Market Uptrend Still Intact?

Sun, 25 Oct 2009 22:37:39 -0400

At some point the bear perspective has to be correct. You choose the evidence. Assuming the market will rise indefinately is just plain silly.

On Oct 25 04:03 PM Shishir Nigam wrote:

> Very similar articles and thoughts from the technical analysis front
> have been put forward at EACH of the numerous minor corrections in
> this extended rally. As an example, consider any of the small corrections
> that happened in early July, in mid Aug, in early Sep, in early Oct
> and now in late Oct.
>
> In every instance, a big overhanging resistance was talked about,
> a reversal in the uptrend was talked about, a pullback in the overbought
> conditions was talked about -- but each time the market broke through
> resistance and shot higher.
>
> What I'd like to ask is how is this time any different?
>
> For more analysis, check out my blog: youngandinvested.com

Bullish Biggs: The Market Has Plenty of Room to Run

Mon, 12 Oct 2009 21:36:04 -0400

The VP of Common Sense handle is based on thoughts like I've posted. That supply and demand is the end-all-be-all most of the time, that Joe six-pack from (you choose the state) probably thinks we get all our oil from the middle east, and that most Americans couldn't find Alberta on a map.

I think it's great that you're concerned about the environment, but consider just a year ago Americans were awash in drill-baby-drill enthusiasm, mostly in terms of right off our own coastlines and in our own protected habitats. You really think we care about boreal forests in Alberta?

If you really love Alberta, and want to protect your local environment, take it up with your (sold out) government. We Americans will gladly continue to buy whatever Canada is willing to sell. If that makes you want to slam me on an esoteric internet message board, so be it.

Bullish Biggs: The Market Has Plenty of Room to Run

Sun, 11 Oct 2009 11:09:50 -0400

Frankly I am ok with destroying 2% of Alberta if the Canadian government is. Once oil hits $200 a barrell we'll probably be willing to extract it from Yosemite, the Grand Canyon and Bald Eagles. If we're really lucky that might actually be a price point that actually impacts demand.

On Oct 10 09:16 PM Albertarocks wrote:

> On Oct 10 08:28 PM VP of Common Sense wrote:

Bullish Biggs: The Market Has Plenty of Room to Run

Sat, 10 Oct 2009 20:28:08 -0400

Minimize the damage to what? It's not like there was a rainforest there before. Oh no! We "destroyed" a grassy plain that was frozen eight months out of every twelve.

On Oct 10 06:09 PM Tom Armistead wrote:

> I apologize for jumping to the conclusion that your questioning of
> global warming made you an enemy of the environment. I have owned
> Suncor from time to time, specifically because I like the plentiful
> supply of energy provided by the tar sands, although I can imagine
> what it does to the environment. As you say, an effort is made to
> put things back the way they were and minimize the damage.
>

Fadel Gheit: Oil Prices to Remain Inflated but Don't Pass on Gas

Sat, 10 Oct 2009 20:20:40 -0400

My simplistic view is that natgas pricing is far more indicative of the US economy than oil, thus the discrepancy.

In the case of oil, once demand exceeded supply the price rose exponentially. Now that supply and demand are more or less hand in hand again the price reverts to the marginal cost of producing the last barrel. Which, for oil sands, is pretty high.

Regarding domestic natgas, something close to the opposite is going on. Demand is well below supply and pricing has fallen to the lowest cost of production. Remember, once the well is built (using the term "well" generically) the operator might as well run it as long as the sales price exceeds the cost of operating. So lots of wells are being capped and we are down to the lowest cost producers.

Since that is the basis of my beliefs, I think that natgas will respond primarily to the domestic economy, meaning pricing rebounds in late 2010. Oil will probably come back sooner as supply cannot keep up with demand when the worldwide economy is at full speed.

Nothing Fuels a Market Rally Like Free Money

Sat, 10 Oct 2009 19:58:03 -0400

Here's a guess: The rally ends when the easy comps end. Specifically, Q1-2010. My guess is earnings in that quarter will be marginally better than Q4-2009 as well as marginally better than the yoy comp of Q1-2009. That is when the lack of improvement in the real economy will impact the equity markets.

Boom or Bust Cycle: Where Are We Now?

Thu, 13 Aug 2009 18:31:27 -0400

There will be a retracement. It will start within the next 10 days.

Markets Need to Pump Up the Volume

Tue, 23 Jun 2009 21:50:16 -0400

By "all in" do you mean long or short? I think I know which, but I'd rather not frame the question.

Big Banks in Trouble: Huge Mortgage Write-Downs Seem Inevitable

Tue, 23 Jun 2009 21:19:54 -0400

I wish people would stop claiming a "borrower" is "walking away" when he or she has a zero down, interest only loan. That person was NEVER an owner, they were a renter. Why is it so surprising that they act like a tennant?

The Seven Habits of Highly Suspicious Hedge Funds

Mon, 22 Jun 2009 17:07:44 -0400

Re:#5, if they were all boy scouts why are they working at a hedge fund again?

On Jun 22 03:08 PM Sovestor wrote:

> Hedge funds and private equity funds are now more than ever, need
> to be ready for more transparency. We believe now more than ever
> investors nowadays regularly (at least annually) should demand and
> request several key items/evidence below from their investment managers/advisors/sub-...
> to significantly reduce risks of frauds (or perhaps identify on-going
> frauds):
>
> 1. Registered investment advisor proof (depending on the legal domicile
> of the advisor, it may or may not be required) with all the filing
> properly submitted and approved.
>
> 2. Fully audited performance proof by respected independent CPA firm
> where the CPA firm is not related to the fund nor the fund manager.
>
>
> 3. Evidence of legal formation and domicile as well active business
> licenses & compliance status of the investment management company
> including the investment advisor and sub-advisor.
>
> 4. Evidence of legal formation and domicile as well active business
> licenses & compliance status (could be on-shore or off-shore)
> of the investment funds including the master fund and feeder fund
> where your capital is/will be invested in.
>
> 5. Background check evidence of all the key investment managers (the
> key persons/team managing your capital) to ensure there have been
> no criminal history or fraudulent activities in the past and to ensure
> what they say are true and correct (e.g.: education background, working
> experience history, license, etc.)
>
> 6. Evidence that stated risk management strategies and investment
> strategies are implemented properly and accordingly. When an investment
> manager/advisor/sub-ad... state on his/her presentation that he/she
> do not and will not engage in any leverage at any time to juice up
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> any leverage at any time.
>
> 7. (Optional) If you have direct access to the key persons managing
> your capital, we encourage you to socially meet and talk to him/her
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>
> Read more at Sovestor.com

Which Country Will Drive the Global Economy Out of Its Recession?

Mon, 22 Jun 2009 17:02:17 -0400

I think Conceptwizard nailed it. The BRIC nations that supply commodities need a rebound in demand far more than those that consume them.

What Will Be the Catalyst for Markets' Next Moves?

Mon, 22 Jun 2009 16:53:18 -0400

Interesting theory Macroman. I've been thinking for a while that high commodity prices could do in the rally by stifiling the consumer, never really considering the alternative.

No State Prosperity = No National Prosperity

Mon, 22 Jun 2009 16:43:53 -0400

Why so bullish? *Sheesh*

On Jun 22 09:54 AM conceptwizard wrote:

> The cost of daily living, from buying food to getting medical care,
> will become difficult for all but a few as the dollar plunges. States
> and cities will see their pension funds drained and finally shut
> down. The government will be forced to sell off infrastructure, including
> roads and transport, to private corporations. We will be increasingly
> charged by privatized utilities—think Enron—for what was once regulated
> and subsidized. Commercial and private real estate will be worth
> less than half its current value. The negative equity that already
> plagues 25 percent of American homes will expand to include nearly
> all property owners. It will be difficult to borrow and impossible
> to sell real estate unless we accept massive losses. There will be
> block after block of empty stores and boarded-up houses. Foreclosures
> will be epidemic. There will be long lines at soup kitchens and many,
> many homeless. Our corporate-controlled media, already banal and
> trivial, will work overtime to anesthetize us with useless gossip,
> spectacles, sex, gratuitous violence, fear and tawdry junk politics.
> America will be composed of a large dispossessed underclass and a
> tiny empowered oligarchy that will run a ruthless and brutal system
> of neo-feudalism from secure compounds. Those who resist will be
> silenced, many by force. We will pay a terrible price, and we will
> pay this price soon, for the gross malfeasance of our power elite.
>

Insiders Selling Heavily: What's Up?

Mon, 22 Jun 2009 16:35:07 -0400

One of my smaller tip-offs was multiple CNBC "people" called the market toppy two weeks ago. Ironically one of them immediately ate his words after a pregnant pause, almost as if his producer tasered him for not being bullish at all times. High comedy.

Best Buy Reaction Could Reflect Sentiment Change

Tue, 16 Jun 2009 23:32:09 -0400

Your argument is that Circuit City had zero sales?

On Jun 16 10:03 PM Jim Mallory wrote:

> That makes the assumption that Circuit City had market share to monetize
> and that they are the only operation that could take the market share.
> Wal*Mart is moving big time into that category and even the local
> Kmart has started to get a little more upscale in electronics. I
> saw a 42" 720p Panasonic plasma at the local Kmart here today. Also,
> everytime I walk into the local Costco there are flat-screen televisions
> being purchased. I know I quit shopping Circuit City and Best Buy
> in any large part years ago and only went their if they had something
> I needed "now" and/or at a fire sale price. In fact, I don't even
> think I have even set foot in a Best Buy in 2009.

20 Considerations to Determine Market's Movements

Tue, 16 Jun 2009 22:32:20 -0400

How about #21: once the market shows moderate weakness (oxymoron?) the bears, shorts, and naysayers will pile on making darn sure our 5-10% retracement is at least the full 10%.

Was Monday a Turning Point for the Markets?

Tue, 16 Jun 2009 21:44:53 -0400

"New Normal" reeks of the 1990's dot-com "New Economy". I say it's the new bullsh*t...

Best Buy Reaction Could Reflect Sentiment Change

Tue, 16 Jun 2009 21:12:57 -0400

The negative reaction was based on the available market share from Circuit City's implosion that Best Buy failed to monetize. Although smart money sentiment sucks too.

Bad News? They're Just Lagging Indicators

Mon, 15 Jun 2009 18:23:50 -0400

After the volatility of the past 18 months, and the VIX still being at 30ish, the closing prediction that we will continue up in a more or less straight line to S&P1200 through the rest of the year is... ahh.... hard to believe. I think the indices will be higher on December 31, 2009 than they are today, but not without a few lumps along the way.

Stocks Will Fall 37% or Gold Will Rally 60%

Sat, 06 Jun 2009 00:22:45 -0400

The barrier to entry to invest in stocks has eroded signficantly over time, frankly it is probably harder to invest in gold than equities at this point in time. I think this is more relevent than the simplistic single variable analysis put forth by the author.

Which Stocks to Watch on China's Growing Oil Consumption

Sat, 06 Jun 2009 00:06:27 -0400

So is this actual demand, or stockpile building? If the latter, there will be an unwind...

SPX and the 200 Day Moving Average

Fri, 05 Jun 2009 23:48:00 -0400

Nice.

On Jun 05 03:48 PM Tomcat101 wrote:

> Change you can believe in.