Jim Hawthorne

In Defense of Buy and Hold

I am in agreement with Jasper M above! There is neither excuse nor rationale for accepting crippling losses through the use of a strategy which owes it's following to the experiences of the last century and ignores present market trading realities!

There is a huge difference between 'timing the market' and 'trend following' based on a combination of fundamental and technical analysis! While timing exact market tops and bottoms may be a fool's errand, recognizing trends through careful analysis is not, and watching the direction 5, 10,15,25,and 50 day moving averages will tell you most of what you need to know.

'Buy and Hold' cannot only be called a lazy man's strategy; it really is no strategy at all!

Party Like It's 1931?

We've all have a great ride since the first week of March! While it's been very profitable fun, I also feel a growing wave of uncertainty.

While comparisons between today and the 1930's are indeed riddled with critical differences, we also suspect that 'bottle-rocket' rallies like this one fly about as well as a grand piano when the steam goes out of them!

Bank Failures: Not a Significant Indicator

Once again, news is just that.... news!

What is critical to us is not necessarily the news itself, but the only thing to note is the Mother Market's reaction to it! Trying to predict how the market will react has become a very risky business! We see time and time again the market's ability to shrug off news that would have been horrendous enough to cause a crash 24 months ago!!!

How Will Markets React to Mexico's Swine Flu Panic?

How Will Markets React to Mexico's Swine Flu Panic? With some degree of panic; the Airlines will tank and the baby pharmas like SVA and PBME etc. will rocket skyward.

The U.S. Is Spending Its Way Out of the Recession

You advice for investors "to go long on the overall markets" without a word of caution is dangerously premature!

The "gamblers" today are both taking profits from the rally and shorting for a retest of the March lows. I would be extremely careful about diving into this frothy market at the present time!

Interview with Peter Schiff: Reflating the Bubble

Excellent, thought provoking article! Thank you!

Peter's opinions are always a valuable addition to the ongoing inflation/deflation debate here at SA.

We should note, however that the current contraction is both global and synchronized; and that both the US and China appear thus far to be coping far better than Europe, Asia (ex China), Latin America, or the CIS/Baltic region.

Peter's prediction may well be come true in the long term; it may just be a matter of timing. Short term we may very well experience a deflationary period where the forces of increased savings, reduced consumption and price declines stave off the inevitable inflationary run-up.

I would look far a well-tested bottoming process to end prior to jumping into any commodities save precious metals, which seem to do fine in both deflationary or inflationary periods!

The Case Against Re-Regulation

Ah, yes! Put the foxes back in charge of the hen-house and let the arsonists run the fire department!

You write that, "The answer is corporate social responsibility based on moral business decisions with the interest of the entire economy in mind."

You seem to be advocating a sort of "faith-based" economic system relying upon a corporate leadership elite totally made over and remodeled; sort of a bizarre version of the 'Stepford Wives'?

Yes, there was poor oversight; there was also blind faith in Adam Smith's 'unseen hand', and a mistaken notion that deregulated markets would 'naturally' regulate themselves. Please, don't set us up for a sequel!

Time to Buy Volatility?

Why not just throw ALL the paddles out of your canoe while you're at it! Do you not realize that we are ALL still up the creek???

On Apr 14 09:01 AM Cetin Hakimoglu wrote:

......."The VIX is no longer interesting or meaningful..."

Time to Buy Volatility?

A pullback at this point would be both fundamentally healthy and a near technical necessity...

The VIX will bounce from support. Prudence dictates profit-taking!

Dynamism and Innovation in Finance: The Path to Future Bailouts

We now have a 'Financialized' Economy, mainly based on moving money around to facilitate mindless consumerism sated by overseas production; a kind of sad shell-game.

While the Financial Sector may well claim to be both Dynamic and Innovative, all I see is a tired old whore gleefully struggling into a new Wal-Mart Lyrca mini-skirt so as to once again hit the streets as the new and improved 'Miss Dynamic & Innovative'.

Yes, the poor old dear will require yet another bail-out.

Mark-to-Market: A Rule That Begs to Be Broken

j_remington nailed it!

This article wants to treat the symptom rather than the disease. Replace Mark-to-Market with some other more refined vehicle if necessary, but please; you don't throw the baby out with the bathwater!

I respectfully beg to differ that Mark-to-Market simply isn't working. In most cases it is! As for 'toxic assets', or assets that have fallen so low as to be virtually unmarketable, I would suggest that the problem there goes way beyond any mere revision as you suggest.

Until we have something better, then let's not just blindly hand valuation back to the very banks that caused the problem in the first place!

The Economy Is Not in Free-Fall

Let me see if my little brain can get this straight: retail sales, which have fallen off a cliff over the past year gave a little hiccup in January-February, and used car sales are up (we won't bother each other with those abominable new car sales numbers now, will we?).

And on this you declare more good news to come, an end to the recession, that recovery will be slow, and the
at if it weren't for Obama, the markets would be flying??? And your evidence is used cars and January close-out sales? What pap!

Look; increasing employment, increasing global sales, increased investment in R&D, and improved earnings in the global arena will provide the impetus to end the recession and get us out of this quagmire.

You seem to think that the old consumer-driven, excess consumption oriented economic model will continue to work forever in today's rapidly shifting geo-political environment! You need to get out more often!

Not Out of the Bear Market Yet

Thanks for another well-reasoned and well-researched piece. Bear market rallies can and do really shake things up, and this rally may very well chug along longer than many expect.

But there are some troubling signs in today's tape:
1. for much of the day, the miners and IT software (net) were doing the most heavy lifting; this dispite falling copper, zinc and lead spots; they fell off in the afternoon; not a good sign.
2. the Banking & Financial Sectors appeared to weaken noticeably into the close. Until we see clear leaders emerge, those two bad boys MUST contribute stability to any sustainable rally, IMO.
3. the oils & energy are weak and weakening...
4. where is the strengthening volume? This is, perhaps the most troubling indicator of all.

I found it to be a disappointing day, and the words of caution from the author and commenters above is sound advice!

How to Know a Bottom When You Don't See One

ArkansasAngie has it right!

Attempting to pick an exact 'bottom' is about the most dangerous pastime a trader can engage in! Market bottoms are NOT a singular event! Market bottoming is a process whereby deeply wounded markets are healed through price and time!

Thus we see again and again and again those 'double-bottoms' and 'triple-bottoms' over and over and over again; each false alarm bringing with it the specter of greater and greater 'whipsaw degradation' of portfolios as short-term profits are taken and trailing-stops are filled.

Forget about calling bottoms! Look for those higher highs and higher lows on increasing volume and improved fundamentals and we'll all do just fine!

Canadian Banks May Be Risk-Averse, But They're Not Immune

A Very good analysis of what is right about Canadian Banks and the weaknesses of Canadian analysts. Thank you!

While Canada remains dependent on the US economy (and who is not?), Canada has also made strong efforts to de-couple from strict dependence on the US over the last 15 years, with considerable success. The danger is that there has been a 'new' dependency on the Pacific Rim to replace it.

Canadian currency is much more 'resource-industry dependent' than it is dependent upon government programs, policy or manipulation. As go basic materials, so goes the Canadian economy and with it, the Canadian banks. It is a truism that Canada's economy is much less 'Financialized' than that of the US and as such is more independent of the machinations and risks of that sector in the US.

It is also true that while US banks contract and struggle to raise capital, Canadian banks have generally been expanding their global reach and diversification.

Your recommendation to pause until the depth and breadth of the Canadian recession is determined before rushing to invest in Canadian Banks is very timely and reasonable.