themackattack

Alcoa (AA): FQ2 EPS of -$0.26 beats by $0.12. Revenue of $4.2B (-41%) vs. $3.9B. Shares -0.5% AH. (PR) Updated 7:10 p.m.: Shares +4.4% AH.

Its kinda funny how right i was here...also, for me at least, it was obvious at the time. People here are so blinded by their pessimism.


On Jul 08 04:27 PM themackattack wrote:

> This will herald a new upsurge in the market. While people have
> been looking at the "head and shoulders" formation that recently
> formed, they should have been viewing the recent market weakness
> as a "dip" that needed to be bought.

Market Rally Exaggerates Reality - Gluskin Sheff

This market will keep going up until it is given a reason not to. It is difficult to say what the catalyst will be, but I don't expect any significant sell-off until there is one.

Personally, I plan to ride the bull until the start of Q3 earnings season, and then get very cautious. It will be disappointing earnings that slow this train down, due to valuation concerns.

Prior to that, only a fool would short.

Alcoa (AA): FQ2 EPS of -$0.26 beats by $0.12. Revenue of $4.2B (-41%) vs. $3.9B. Shares -0.5% AH. (PR) Updated 7:10 p.m.: Shares +4.4% AH.

This will herald a new upsurge in the market. While people have been looking at the "head and shoulders" formation that recently formed, they should have been viewing the recent market weakness as a "dip" that needed to be bought.

Are the mutual-fund investors who are pouring money back into emerging markets, junk bonds and volatile energy a) trying to make up for losses, b) chasing performance, c) headed for a big fall?

could it be that, with imminent destruction off the table and the vix at a reasonable level, buy and hold investors are simply buying the assets that will appreciate most significantly over the next 10+ years (irrespective of their recent impressive gains)?

naaa, couldn't be...

The macro economic conditions that preceded the Argentinian collapse in 2001 - when foreign investors lost confidence in the government and refused to roll over short-term bonds - are astonishingly similar to the U.S. today.

Ok, similar, save one absolutely over-the-top critical point -- Argentina is not the United States. The US Dollar is the worlds reserve currency, and until proven otherwise, the US is the leading "safe-haven" during times of economic trouble for people the world over. This was conclusively demonstrated 4 months ago when people thought the world was going to implode, and Treasuries performed incredibly.

Otherwise, yes, conditions are identical. Do you really think the results will be?

Natural Resources Out, Non-Cyclical Blue Chips In

For the last few years I have come across, from time to time, investment strategy articles that draw their guidance from the past, and that suggest "valuation methodologies will return to past practices."

One day one of these articles will be proven correct -- P/E's will lower, valuation based on cash flow, profitability and value will become of primary importance, etc.

Maybe this is indeed that time. Maybe this is finally the turning point back to fundamentals based investing that reigned prior to the 80's. It just might be...

BUT, that is an investment bet that goes against the trend and against the last 20+ years of market history. It is an outlier bet, at best. While it may prove true, and this article may prove prescient, it is not a high percentage bet, and market dynamics over the last 20 years would suggest it to be an unlikely outcome.

John Hussman: Context Matters

Read this twice -- as far as I can see you said we could trade in a range, we could break down below March lows, or we could begin a steady rise. Apparently you will wait to see which is going to happen and then take a position to profit accordingly. We must be thankful that we have the ever-nebulous "market internals" to guide our decision making on this point...

Sentiment Overview: Bulls Rushing in at Alarming Rate

Whether this rally was based on sound fundamentals or not is almost moot at this point. The reality is this rally came at just the right time, and appears to be of an adequate duration to bridge the gap until some effects of the stimulus plan start to show.

The stimulus doesn't get much discussion any more. A near trillion dollar investment by the government is bound to show a measurable impact on the economy, and when it does it is likely to be perceived as a continuance of the recovery that is perceived to have started in early '09.

Personally, I think we've entered a great economic decline that will see a continuance of the market downtrend. BUT, I do believe we could see the market rally for the remainder of '09 and much of '10 as a result of the stimulus impact. Probably sometime in 2010 further credit problems will materialize and the downtrend will resume.

All You Need to Know about the First-Time Homebuyer Tax Credit

I would probably go ahead and buy a house if it weren't for the income cap limits. Seems like a silly thing to put a cap on if you are trying to incentivize people to take the leap and a risk during a declining market.

I thought the purpose was to incentivize with the aim of helping the housing market, not so much just to subsidize lower income people.

Oh well...guess I will just rent for another year until prices are even better.

Inflation Can Be Terrifying

Good god what a bad day to be short India...hope your portfolio allocation wasn't too significant!

Past Years Most Correlated with 2009

Most important near term aspect of this comparison is the pullback both comp years suffered after the March/April rally.

May see something similar near term here...

Housing: Objects in the Mirror May Appear Closer than They Are

Maybe true, but soon is relative. There is so much pent up inventory that prices are likely to still decline for 6 months or more, even if its starting to turn.

So the impact on the equities markets may be soon, the best time to buy housing is probably still a ways off.

Global Stock Market Valuations: Patience Is a Virtue

Is it safe to say then that Cetin and Jorb and indeed the same characters?


On May 04 03:24 PM Jorb wrote:

> That's why I'm cherry picking the best stocks that benefit from global
> growth such as MA POT and Google, as opposed to buying an index.
>

Wall of Waiting Cash Could Drive Equities Higher

dollar cost averaging is a smart entry strategy, but the notion that it is a good strategy when applied mindlessly (e.g. consistently without regard to any additional factors) is a fallacy. It works best when the market is priced attractively or is in a down-trend.




On May 02 08:05 PM VennData wrote:

> Folks who say "money on the sidelines" do not understand money.<br/>
>
> Folks who do or don't "bet a recession is coming" and invest that
> way will have to make numerous correct guesses for the rest of their
> lives to beat the indexes. It defies logic they will outperform
> consistently.
>
> Sit tight, dollar cost average in, rebalance... anything else is
> speculation.

Wall of Waiting Cash Could Drive Equities Higher

The market appears "overbought" in the classic sense, and who wouldn't think it a bad time to buy after one of the largest two-month rallies in history. I have to admit that my expectation was to see some profit taking after such a monumental rally, and I was positioning myself to capitalize through some short positions.

But then I began to see things through a different prism of potential. First, let me start by saying that I believe it is a bit "contrarian" to be bullish at this point, precisely because the market has risen so much and so quickly. In some ways a continued bullish move would surprise us all because it would be historically inconsistent (and, therefore, contrarian).

We have to remember what the context is for this substantial rally -- and that is the second most severe decrease in the US stock market in history, at a pace that exceeds nearly every previous decline. Further, the decrease the market suffered from Jan 2009 to March 2009 was particularly severe, and neared catastrophic levels (failure of annuity companies, pension funds etc). The reality is the market was priced in late February as if the American economic system was on the verge of collapse.

Over the last two months it has become very clear that the American economy is not on the verge of immediate collapse (I'm not saying it won't collapse in the next few years). This realization has driven the market up rapidly, and justifiably so. Now, why would the market continue to go up after such an extreme rally? Well, quite simply the market has moved from a pricing level that reflected an expectation of economic collapse to a market level that presupposes a continued extremely severe recession. If economic statistics should begin to show recovery at all (and some are beginning to) we will quickly see the market priced at a new level, one that is more consistent with normal recessions or post-recession recovery.

People are so consumed by the magnitude of the current market appreciation, but when looked at in the context of the extreme magnitude of the recent decline, one can argue that we've only reached equilibrium as opposed to being "overbought". There is more to being truly "overbought" than just what the technical indicators might be saying.

Lastly, I believe that this bullish trend and recent rally has probably bridged the gap to the point in time where we begin to see the government's economic stimulus begin to have a significant impact. If you don't think nearly a trillion dollars of economic stimulus is going to at least create the appearance of recovery, you are mistaken. It's likely that the recent imaginary "green-shoots" will lead to stimulus created "green leaves".

I don't know what will happen in 2010 and beyond, but I will be positioning myself for at least a short - term market bounce to Dow 10k within 2009.