Doug Short's Comments

World Markets Weekend Review: Deeper In The Red

Sun, 20 Nov 2011 15:16:40 -0500

The 4-week table is a carry-over from last week. Here's a link to the correct table: http://bit.ly/rrdldq

I've asked the editors to make the correction.

Inflation: A Five-Month X-Ray View

Thu, 17 Nov 2011 15:18:12 -0500

Yes I think the CPI is reasonably accurate. See the comps with MIT's Billion Prices project: http://bpp.mit.edu/usa/

However, as I've pointed out elsewhere, individual households can have very different exposures to inflation. More here:
http://bit.ly/tFrjJa

Fed Intervention And The Market: A New Update

Tue, 08 Nov 2011 08:44:35 -0500

You might consider keeping an eye on these for the yield-to-interest correlation:

CBOE Interest Rate 10-Year T-Note
http://yhoo.it/sbkK1t=^TNX <= copy the link and paste

30 Year Treasury Yield
http://yhoo.it/sbkK1t=^TYX <= copy the link and paste

I follow mortgage rates here:
http://bit.ly/uGibr3 (weekly)
http://bit.ly/tieEP4 (daily)

Fed Intervention And The Market: A New Update

Mon, 07 Nov 2011 23:40:09 -0500

It's an effort to drive yields lower as a means to lower interest rates in general (e.g., apparently the Fed doesn't think the current 30-year fixed rate mortgage of at 4% is cheap enough).

Here is a verbatim quotation from the Fed's website on operation twist:

"By reducing the supply of longer-term Treasury securities in the market, this action should put downward pressure on longer-term interest rates, including rates on financial assets that investors consider to be close substitutes for longer-term Treasury securities. The reduction in longer-term interest rates, in turn, will contribute to a broad easing in financial market conditions that will provide additional stimulus to support the economic recovery."

The Q Ratio And Market Valuation

Wed, 02 Nov 2011 20:20:48 -0400

You've nicely summarized the opposing views. As someone who has been following the market for several decades, I'm skeptical that intangible values have increased significantly over time. Ford had intangible assets in the 1930s. So did IBM -- both with us today -- as did RCA, which has long since lost its distinct market identity.

Perhaps "intangible" book value has some merit, however slight. On the other hand, perhaps "intangible" book value is in fact "not tangible" in the world of valuation.

Forecasting the Market: A Thought Experiment Revisited

Wed, 02 Nov 2011 20:10:05 -0400

Nicely put. That was the implied point of the guest contribution by Chris Turner.

The Q Ratio And Market Valuation

Wed, 02 Nov 2011 15:21:37 -0400

See the footnote in the original article, which SA didn't include:
http://bit.ly/rR8Gdc

Flat Friday Caps A Fine Week On The S&P

Sat, 29 Oct 2011 10:07:40 -0400

Skookum, a number of websites syndicate my charts. Some request the MAs, others expressly request that I not include MAs. So I do it both ways.

GDP Q3 Advance Estimate: 2.5 Percent

Thu, 27 Oct 2011 23:11:11 -0400

WestCharlie, Today's 2.5% was the real GDP (inflation-adjusted with the GDP deflator). Nominal GDP (without the deflator) was 5% (5.04% to two decimal places).

Economists' GDP Forecasts: 2.1 In Q3 And 2.0 In Q4

Mon, 24 Oct 2011 09:38:23 -0400

Hypnos7, actually that's a good question. The headline GDP number from the Bureau of Economic Analysis (BEA) is for real (inflation-adjusted) GDP. In fact, the BEA calculates its own deflator to make the adjustment.

The economists surveyed by the WSJ understand that their forecasts are judged on how close they are to the real GDP numbers of the BEA. So, yes, they are making real GDP forecasts.

The Tuesday 2%

Wed, 19 Oct 2011 07:33:22 -0400

I've alerted the SA editorial team that they have posted charts from two weeks ago with this commentary. For the correct charts, see the original on my Advisor Perspectives website:
http://bit.ly/nJLfB3

S&P 500's Standstill Tuesday

Tue, 11 Oct 2011 22:41:45 -0400

Seeking Alpha has erroneously posted a old chart for this commentary. The correct chart, updated daily, is available on my website: http://bit.ly/o5IvXR

3-Day Rally Ends For S&P 500

Sat, 08 Oct 2011 13:40:56 -0400

Yes, here's a longer timeline, courtesy of Stockcharts.com:
http://bit.ly/nNUpHl

3-Day Rally Ends For S&P 500

Sat, 08 Oct 2011 12:59:46 -0400

Seeking Alpha posted old charts with this article. Here is the article on my website with the latest charts:
http://bit.ly/nJLfB3

Note: Unless traveling, I overwrite these charts virtually every market day with the latest data.

Weekly Unemployment Claims: Good News, Down 37K to 391K

Thu, 29 Sep 2011 22:46:30 -0400

Which is one of the reasons why I included a 52-week moving average of the NSA data.

Household Incomes By Age Bracket: A Disappointing 21st Century So Far

Fri, 23 Sep 2011 23:18:03 -0400

Hi Stilldazed,
Note that the statistics are for households, not individuals. The cohort categories are based on the age bracket of the head of household, but the income would be the total for all earners in the household. So combine your salaries for purposes of comparison.

Also, note that the data is inflation-adjusted to 2010 dollar values, so your $52K from 10 years ago would be adjusted upward to about 65K.

The 21st Century Has Not Been Kind To Equity Investors

Mon, 12 Sep 2011 07:49:35 -0400

Here's the S&P 500 with dividends reinvested over the same time frame:
advisorperspectives.co...
The dividend difference is less significant than most people realize.

The Lost Decade For The S&P 500

Sun, 11 Sep 2011 19:30:40 -0400

In response your your remark: "I think it would be more prudent to measure from the long-term avg PE ratio and advise people to avoid the market when it shows signs of 'irrational exuberance'."

See, for example, this:
advisorperspectives.co...

Recession? No. We're In The Second Great Contraction

Fri, 02 Sep 2011 11:18:39 -0400

bigazul -- The quarterly GDP data goes through multiple monthly adjustments by the BEA, and annually (e.g., this past July) the BEA makes further historical adjustments. The employment data series (PAYEMS) is seasonally adjusted -- source the BLS. /Doug

Gasoline Prices And Sales: What They Tell Us About The Economy

Tue, 23 Aug 2011 11:33:07 -0400

SMaturin -- I feature an analysis of the Ceridian Pulse of Commerce Index every month the day it's published:

advisorperspectives.co...

S&P 500 Snapshot: The Thursday Thrashing

Fri, 19 Aug 2011 14:57:50 -0400

Mike, Good question. Here's a sneak peak at what I've been working on this afternoon, which sheds some light on the topic:

www.advisorperspective...

What you see here is a much longer perspective than my recent S&P snapshots. And I've included not only the 4% plus declines but also the intraday volatility. The 4% number was a completely impromptu pick, not the result of data mining -- just a round number that resonates. I could fiddle with 5% or 6% or whatever, but the implication, I think, would be much the same: volatility of this degree is by no means exclusive to market bottoms. Over the long haul it appears to have a higher correlation with secular bear markets than secular bulls. The crash of 1987 is a notable exception. /Doug

World Markets Weekend Review: Bear Cubs Abound

Sun, 14 Aug 2011 09:16:44 -0400

The table at the top of the article is the one from last week. Here is the correct table for the week ending August 12th:
advisorperspectives.co...

I've alerted the editorial team.

Treasuries Catch Fire and Yields Implode

Fri, 05 Aug 2011 10:45:55 -0400

Well, see the implications here: advisorperspectives.co...

Vehicle Miles Driven and the Ongoing Economic Contraction

Tue, 26 Jul 2011 23:16:51 -0400

Actually, if you adjust for population growth, gasoline demand has indeed declined, despite fuel efficiency: advisorperspectives.co...
For this series, I used the total population rather than the16-and-over population i used in the miles-driven series. The reason is that a certain amount of additional mileage is the result of child-rearing needs -- trips to daycare, school, and many other activities requiring transportation that the child-rearing years entail.

Taxes, Entitlements and the Federal Debt Crisis

Sun, 10 Jul 2011 00:38:26 -0400

LA_CPA -- see the last chart above. Outlays have exceeded revenues since 2002, six years before the unemployment increase of the Great Recession.

The Total Return Roller Coaster

Thu, 07 Jul 2011 00:41:06 -0400

Thanks for the suggestion. I update this article every 2-3 months. In previous updates of this article I got the same comment from another reader. So the next update I aligned as you suggested, and then I got multiple emails complaining that the should be lined up as in this update. So this is the version I've been doing the last half-dozen or so updates. I think the sense of the correlation is obvious with either alignment.

Market Valuation Indicators Continue to Signal Caution

Sun, 12 Jun 2011 09:03:51 -0400

bbro -- I follow the Ivy Portfolio here:

Monthly Moving Averages: May Update
dshort.com/articles/mo...

Measuring the Performance of the Ivy Portfolio
dshort.com/articles/20...

I don't include it with the valuation indicators because the Ivy system is a momentum, trend-following strategy that doesn't take valuation into consideration.

NYSE Investor Credit and the Market: Another Caution Signal

Thu, 09 Jun 2011 16:06:43 -0400

granger -- the NYSE releases the margin data monthly here: tinyurl.com/5unfp7t

I've yet to find a calendar for the release dates, so I simply check periodically. I'll be updating the chart in this commentary on a monthly basis going forward on my dshort.com website.

Yields Plunge as Treasury Rally Accelerates

Thu, 02 Jun 2011 09:57:20 -0400

Thanks, yk -- that's an interesting point: "the PIMCO effect". I like it.

Michigan Consumer Sentiment Index: More Upside Surprise

Fri, 27 May 2011 14:45:32 -0400

Freddy -- Thanks, it's my pleasure (or as my wife would say, my addiction to visualizing data in Excel). /Doug