Fred Voetsch's Comments

2010 Investing: A Tale of Two Economies

Tue, 29 Dec 2009 16:12:07 -0500

"...where I lectured..."

You'd never make it in America, we do things rather than lecture about them. :-)

2010 Investing: A Tale of Two Economies

Tue, 29 Dec 2009 16:10:35 -0500

"General Petraeus seems to think that these are good wars..."

Actually I am sure you will find that he simply wishes to win any war he is in nice and quickly with the fewest possible lives lost. But then, that wouldn't make you feel superior, would it?

Talk such as yours is a sure sign that we will soon have to come save you and your kind from a tyrant once again.

On Dec 29 02:56 PM Ferdinand E. Banks wrote:

> Hmm. NeunElf seems to think that there are some bad things in the
> French health system. Everything is relative, isn't it?
>
> I taught at the University of Grenoble, and for some reason my wife
> needed some medical attention. She located a doctor, produced her
> passport, and was immediately taken care of. I dont remember any
> money changing hands. That was 20 years ago, and today the same sort
> of thing happens in Spain, and probably everywhere in Western Europe.
>
>
> As for a low birth rate, the French don't have to worry about that,
> because a large fraction of the Third World dreams about living in
> their country. At the hotel where I lived in Montparnasse last year
> the only French person working there was the manager. I should also
> mention that I didn't see any 'non-French' faces at the elite school
> where I lectured in Genoble, nor the up-market place where I lectured
> in Paris, nor the Ecole des Mines (Paris) where I used the library.
> By way of contrast, at the up-market 'elite' schools in the US, they
> say that. in some faculties most of the faces are 'non-American'.
>
>
> As for the really bad news about the US, don't chalk that up to American
> workers or capitalists, but to Bill Clinton (and his internationalist
> sentiments) and George W. Bush - especially the latter. Starting
> a war on the basis of a lie creates a bad example, and the cost of
> that war and continuing the other war is outrageous. General Petraeus
> seems to think that these are good wars, and he should know. He
> has eight and a half rows of ribbons on his uniform, but as far as
> I know has never been in combat at the platoon or company level.
> No wonder he thinks that it is a good war.

My 2010 Market Predictions

Mon, 28 Dec 2009 15:39:33 -0500

I like this comment and as more and more people get back to such basics you will THEN see our economy begin to improve. But we still are led by people who are liars and cheaters (on the left and the right) and are willing to risk everything to pay off those who have supported them financially. My guess is that we have at least ten more years before we get our act together once again.

On Dec 28 09:04 AM BlueOkie wrote:

> Investing is not about how you did last week, last year or even last
> decade. It is about saving and growing a nest egg for when you need
> it.

My 2010 Market Predictions

Mon, 28 Dec 2009 15:34:40 -0500

Why should the dollar go down when most other countries are also debasing their currencies? What will go up is gold as it will be left standing as the only true money of any value. BTW, I am certainly no gold bug, I simply look at what makes sense.

What also makes sense is that the bounce to close the gap and lure in the last remaining bulls will end when we close the gap left open from July of 2008. That's about 11,000 on the Dow. At that time those bulls will be so full of themselves and the bears will be so uncertain that the correction will be able to continue its destruction of wealth.

On Dec 28 02:01 PM Iscaethebear wrote:

> Brian:
> We can't keep printing money and strengthen the USD at the same time.
> The USD only has one direction to go over the long haul and that
> is down. There maybe minor swings in the short term but until we
> change the way Washington operates our dollar is going down. I like
> materials, China, energy , certain ag stocks, precious metals and
> uranium.
> Regards,
> Bruce

My 2010 Market Predictions

Mon, 28 Dec 2009 15:25:49 -0500

"As bad as 2008 was for me and everyone"

Wrong. 2008 was easy to predict just as the coming years are easy to predict. The exact timing, of course, is hard to predict.

"Given all this, I take some very small satisfaction in being down only an average of (-1%) annually for the past ten years in my overall portfolio..."

Time to buy, buy, BUY! ...according Jim Cramer. Take a look at Japan if you want to see our future. We have at least ten more years of poor returns based on over-valuation of equities and the damage done and being done by our so-called leaders.

"SP500 aggregate earnings will exceed consensus expectations of $65-75. They will finish the year at $85 which will justify a 1,275 SP500 price based on a P/E of 15"

Misinformation such as this is exactly why we have years and perhaps decades of continuing poor returns in equities. As anywise old person will tell you(Richard Russell is my favorite), this bear market will not be complete until we see great values; P/E ratios approaching 5 and dividends as high or higher than P/E's.

Please people, use historically relevant data such as reported earnings if you wish to not have to make statements such as this in the future: "Given all this, I take some very small satisfaction in being down only an average of (-1%) annually for the past ten years in my overall portfolio."

The Japanese also thought their market couldn't drop for 20 years...WHOOPS!

10 Reasons the Equity Rally Is Over

Wed, 09 Dec 2009 15:25:54 -0500

On Dec 09 01:40 PM lorddarley wrote:

>So buy great companies,
> and don't fixate on "the market."

I don't disagree totally but if you buy great companies at a bad time (Apple in late 2008) you are not maximizing your investment. Smart investors are patient and wait for both to line up.

10 Reasons the Equity Rally Is Over

Wed, 09 Dec 2009 15:21:18 -0500

This is a classic bear market rally that may have run its course or may have a bit more to go as it has yet to fully bounce back to the baseline established in July or 2008.

IMO, we are in a bear market that will end up looking like a hybrid of the Japanese decline of the past 20 years (long) and the American decline from 1929 to 1932.

I can find no compelling reason to be long this market except to try and generate short-term gains and that is now a very risky strategy.

Richard Russell has it right when he points out the obvious: a true bull market will not begin again until there is great value to be had and that is not presently the case.

In summary: I believe the ascent from the March 2009 stock market lows are due to a technical rally that ideally should reach 11,000 on the Dow in order to close the gap between the July 2008 lows and the March 2009 low. This would only apply if we are in a continuing primary bear market. Our present level may be close enough to 11,000 given the time that has passed but don't be surprised if the stock market somehow manages an additional leg up.

10 Reasons to Believe That We're in a Depression

Fri, 20 Nov 2009 16:06:47 -0500

Wish I could vote thumbs up for this one a few more times...LOVED IT!

On Nov 19 12:49 PM j-dub wrote:

> COUNTERPOINT:
>
> Since I lost my job earlier this year, I am able to stay home and
> watch CNBC all day, everyday. And I've learned three very valuable
> pieces of information from watching day in and day out that I am
> happy to pass on:
>
> 1) Everything is fine.
>
> 2) Our government is making ALL the right moves because Ben Bernake
> is a genius.
>
> 3) The economy is just a bit behind schedule concerning employment.
> That'll solve itself. (refer to #1)
>
> Watch a lot more CNBC Mr. Clark, and you'll come to the same conclusions.
> They don't get involved with all those fancy numbers and such and
> it's fun to watch Cramer jump around.

Gold Is Not in a Bull Market

Mon, 02 Nov 2009 17:51:54 -0500

On Nov 02 05:23 PM maketalwaysgoesup.. wrote:

> This market always goes up. DJIA 10,600 soon
>
> good articles: financeopinionss.blogs.../

Tell that to the Japanese. But in fact, this market is substantially lower than it was not much more than a year ago and is about the same level it was at ten years ago with the NASDAQ being much lower. If you count the companies that have been removed from the various indices they would be much lower.

Gold Is Not in a Bull Market

Mon, 02 Nov 2009 17:47:51 -0500

The mother of all bull markets? Hardly.

30 years later gold is only up slightly from it's high in the early 1980's while the stock market in 2007 was 14x its previous bull market high in 1966.

I can only think of one person who I know that owns actual gold. Public speculation has not yet begun and it will likely be in full force before we see the highest prices.

Given that information and the wholesale printing of worthless, fiat currency, I would suggest that gold is the bull market of the future.

Lessons from a Market 'En Fuego'

Fri, 18 Sep 2009 12:34:47 -0400

"The other day Laszlo Byrini made a comment that I have made many times before (not sure who originated it) which is that the bear case is always more compelling and more articulate. I can't make a convincing bull argument. Ages ago (the end of 2008), I made the case for a big snapback rally based on the simple fact that no matter how bad things are (were), after hideous declines the market retraces a noticeable portion fairly quickly."

The first part is a very good point. The second part points out its weakness since Byrini has been shilling the market and publishing bad PE data since late 2008, when the Dow was at about the same level as it is now. hmmm...

The bear case was right. THAT IS A FACT. The stock market is off 35% from its high and we are still in a primary bear market, according to the foremost experts on Dow theory and are in a classic bear market rally. All you are doing right now is setting yourself up to look like a complete and total fool when the primary trend continues.

I suggest you listen and learn as you go through life rather than spending the majority of your time an effort in justifying your bad decisions. Look up "The Greatest Bull Market in History" and actually see how people made excuses and continued to lose their wealth because they couldn't see that the 1920's were over. Check out the period after the crash of '29 and see how similar that is to now. Note that we have much larger problems now than then.

Study historic valuations and you'll see that we have much farther to go on the downside - or many more years to go - before the market achieves those great valuations that mark the bottom of a SECULAR BEAR MARKET.

Perma bears ARE wrong but what do you say to someone like me or Gene Inger or Richard Russell or the many others who have always been bullish and only turned bearish recently and have good reason and still have good reason? It seems to me you make excuses and the same mistakes that the perma bears make.

Capacity's Comeback Strongly Indicates Recession's End

Thu, 17 Sep 2009 14:33:33 -0400

The recession is over but stocks are still historically overpriced by a good margin, if you believe we are in a long term, secular bear market, which will include many ups and downs but will cause the stock market to be revalued in a dramatic way.

Anyone who looks at what is really happening and listens to the smartest, independent thinkers out there (hint: Nobody at CNBC is on that list but Richard Russell, Gene Inger, Meredith Whitney, Louise Yamada and John Mauldin are) knows that there is much more pain to come before happy days are here again.

This is a relief rally and a blip upwards known as a "dead cat bounce".

So yes, you're right that this recession is over, but this is not the 1980's or the 1990's or the first part of the 2000's, this is a deflationary era that has already and will continue to destroy wealth by the trillions.

Understanding the 'Q' Recovery

Wed, 19 Aug 2009 17:50:08 -0400

BS. We WILL hit new lows over the coming year and the market will adjust for the excesses of the past decades. People like this are the tools of a bear market. The market must get gullible people to buy in again and again even though there is plenty of data telling them the market will correct for the excesses.

Only when people like this are asking "Would you like fries with that?" will it be time to go long for the long haul. Listen to Richard Russell, he'll tell you.

In Fed We Trust: Ben Bernanke’s War on the Great Panic, by David Wessel

Mon, 17 Aug 2009 14:29:02 -0400

"Wessel’s message is that over the last 22 years, leaders in our country, the Chairmen of the Federal Reserve’s Board of Governors, have operated on an ad hoc basis and in so doing have created a fourth branch of this government, a branch ruled by arbitrary decree."

This says it all. We have been building too high with little foundation and the pieces have long been in place for a catastrophe and we are only in the eye of the storm.

Cramer's Mad Money - Paul Krugman Is Wrong (8/10/09)

Wed, 12 Aug 2009 11:23:38 -0400

"While investors equate being bearish with playing it safe, it may well mean missing a 45% gain since March."

How flawed is such a statement and the thinking behind it? Very!

First of all most of the people who were bearish also missed losing 55% of their portfolio up until March (still being ahead by 35%) and most that I know, including me, caugh this rally early and only got out after a 20% or more runup.

The worst part of this thinking, of course, is that it's based on fear, the classic tool of a bear market. Folks, you'd better get in on this rally before it's too late...HURRY! HURRY! HURRY! Fear-based investing is always a bad idea. The only worse idea I can imagine is listening to Cramer the clown.

The Market Bubble Is About to Pop

Wed, 12 Aug 2009 11:15:38 -0400

"Stocks have dramatically underperformed their long-term average. In fact, the years from 1997 to 2007 may have been the worst ever in real terms."

What? This is completely wrong.

Five Reasons the Market Could Crash This Fall

Wed, 05 Aug 2009 17:40:15 -0400

The stock market may crash or it may not but it will likely crush a lot of people both long and short along the way. We were warned by some very smart people (Louise Yamada comes to mind) that wealth distruction is what is coming and to really do the job properly we have to be dealt with emotionally; the market will go up 50% and just when everyone jumps on board, scared to miss the runup the market falls. The market falls like a rock and just when everyone jumps aboard those double-short ETF's it reverses course and bulls ahead.

The market is us and that's what most never understand, and we have trained ourselves for the past several decades to believe we are genuises and can beat the market but my guess is that the market is about to beat all of us...senseless.

Fair Value for the S&P 500? Tell Me Lies, Sweet Little Lies

Wed, 29 Jul 2009 11:31:52 -0400

On Jul 29 08:54 AM CLH wrote:

> Macro man has been wrong for 5 months. He seems to be setting a record
> for being wrong the longest.
>
> For one year (2008) panic reigned as the frightened investors threw
> away their investments. The S&P will go a long way up as the
> losers continue to lose by not buying stocks (they are quite happy
> with their 0.5% bank accounts which continue to go nowhere.)

This is prime example of why one should not involve their ego when investing. CLH has ignored the fact that the market is still down about 40% from its highs in 2007 and by any measure is in the throes of a bear market. Many wise people did see the bounce from the lows in March and profited and are now out, waiting on the sidelines, a perfectly reasonable and prudent startegy, imo.

I have taken losses believing that the market had topped but with a good strategy those losses have been limited and I will be in position when the market has head faked enough people and really makes its move. If I am wrong I may even end up back where I started in 2007...a reasonable position, as far as I'm concerned.

Given the historical data on valuation and current economic climate there is almost no chance the market will continue higher past a point of simply filling the gap left from the crash of October 2008.

Fair Value for the S&P 500? Tell Me Lies, Sweet Little Lies

Wed, 29 Jul 2009 11:16:17 -0400

"...It's also a pretty good indication that if someone tells you that they "know" what fair value is for the SPX or equities generally, they're almost certainly lying."

A great article but the conclusion should be that "fair value" should be based on historical data. That means we use reported earnings to apply the historical range of P/E ratios. Given that Standard & Poor's predicts a P/E of 26 at an S&P 500 level of 919 at the end of 2010, I would say that we are easily way above fair value. Only if you believe we can expect high growth in the coming months and years can you provide any sensible, fact-based arguement and even then then it is hard to argue that the stock market is undervalued.

The market will do what it's going to do in the short run but in the long run it will revert to a reasonable level of valuation and that is much, much lower than where it is at currently.

See S&P's data for yourself:
www2.standardandpoors....

Options Trader Weekend Update: Charts, Art and Market Manipulation

Mon, 20 Jul 2009 14:43:59 -0400

On Jul 19 10:18 PM CLH wrote:

> When people are losing and all bears are losers, they look for excuses.
> The market was driven last year by total panic. What little movement
> the market shows now will be up. There are no sellers left.

Actually, according to Lowry's there are plenty of sellers and buying power is not showingthe strength one would expect from a bull market.

Options Trader Weekend Update: Charts, Art and Market Manipulation

Mon, 20 Jul 2009 14:34:35 -0400

A great article with points that need to be taken into account by every investor.

There are people & companies trying to sway the market and this is where we can actually profit because they can only blow bubbles for so long before those bubbles burst.

Can Anything Be Done About Housing Price Cycles?

Wed, 15 Jul 2009 13:18:28 -0400

"The interesting question is whether there's anything to be done about such housing prices cycles."

Not so interesting, except to note that these same questions are asked every time a bubble bursts.

80 years later when the next bubble bursts all the safeguards that were put in place will be ignored because, "This time things are different!"

Until then we will have the fresh memory of experience to keeps things in check, and that is what really does the trick.

China's Helicopter Wen: World Champion of Money Printing

Wed, 15 Jul 2009 12:55:30 -0400

Good data.

Keep in mind that earnings reports are often much better early on and tend to get worse. As well, beating lowered estimates is only good for awhile and then we need to see real growth. It is also wise to use S&P's data at www2.standardandpoors.... as they tend to be more consistent, truthful and realistic. As well, you get real data instead of just headlines that are meant to shill the market.

Read this line from the link above about Q1 2009 and compare with what you heard from CNBC, Bloomberg and the rest:

"Q1 2009 498 issues (99.70% mkt val) rptd: Qtr ending -39.0% below Q1,'08 and -25.5% off estimates, sales off -16.5%, As Reported down -51.5%"

25.5% off estimates??? You didn't hear THAT in the financial media.

Yes, we survived the end of the world as we knew it, now we have a long, hard process ahead of adapting to a new reality of slow or no growth, possibly for the next decade or two.

Digging Deeper into Historical Market Data 1871-2009

Tue, 14 Jul 2009 13:16:02 -0400

On Jul 14 11:00 AM DaveW wrote:

> If this current fiasco plays out anything like the 1929 mess (and
> so far both eras have striking similarities), then you have to note
> two things. 1.) the width of the bands in Figure 2 are quite variable
> and our current down month band could increase by up to 50%. Also,
> 2.) note that 1929 was followed by more than a decade of down months,
> so ones money would have had best odds going short the market for
> over a decade rather than trying to catch rather brief rallies.
If
> you are a player of odds, you have to recognize which direction the
> main current is flowing, rather than trying to catch minor eddies.

Had you stayed short after July 1932 I believe you would have gone broke very quickly.

Shorting the market is a bad strategy for almost everyone almost all the time. A better strategy is to identify a potential crash and be very conservative and on the lookout for the signs that always preceed a crash - breaking through the 50 day moving average, for instance.

As a rule, anytime a major panic has taken place the worst has been priced in and a long position in the market will pay off in the long-term, if not the short.

Vastly overpriced stock markets don't come along all that often and are not that hard to identify as long as you don't count anyone from CNBC as an investment adviser.

The typical investor simply needs to learn to identify high risk situations and avoid them to dramatically increase their returns. Tuning out greed is the answer.

Digging Deeper into Historical Market Data 1871-2009

Tue, 14 Jul 2009 13:04:23 -0400

" I think too many people make the leap from doubting the predictability of markets to believing that fully invested is the correct path and adjusting your market exposure is a waste of time."

That's my favorite line from the article.

I like this article because it makes me think. What do I think? Buy low and sell high.

We should all (including me) not get too wedded to our views. The market will do what it will do and it can say irrational much longer than you or I can stay solvent.

Truck Tonnage: More Evidence of Rising Pressure on Transport Sector

Tue, 14 Jul 2009 12:52:24 -0400

That's a very ugly chart of a very important data point. Where is Cetin when we need him?

Pompous Prognosticators 2004-2009

Mon, 13 Jul 2009 12:59:35 -0400

On Jul 11 03:23 PM Paul H. M. wrote:

> Why would we want to grow so much? Seems like as long as people have
> jobs, homes and food, then we can all live happy lives.
>
> Obama is working to achieve just that: a environment where people
> can live happy lives.
>
> With health care soon to be available to all, that alone should create
> man millions of new jobs. Those jobs will create more tax revenue,
> and more opportunities for other businesses.
>
> Growth, without good reason, is a quality of cancer. We should focus
> on creating a sustainable society in which nobody feels the need
> to rob each other, because people generally have what they need.

You won't be too popular here with these comments but you are correct; as long as we continue to try to grow in artificial ways we not only will continue to see overly large booms and busts but we will need to continue to create useless, mindless products that treat our children like consumers rather than people.

I remember as a young person hearing about consumerism and thinking that this could never come to be; I was wrong, unfortunately.

Pompous Prognosticators 2004-2009

Mon, 13 Jul 2009 12:55:20 -0400

My favorites were the fools of "Fast Money" who I relied on for over a year as a counter-indicator. I remember all of them being astonished in the fall of 2007 that the subprime problem had been taken care of in only a few weeks.

As each market panic would hit I would buy into it once I could see them holding back the urge to jump out the nearest 10th-story window.

'The Crash of 2008 and What It Means' by George Soros

Mon, 13 Jul 2009 12:24:39 -0400

On Jul 13 12:17 AM Hmm?! wrote:

> It is very clear to me that the US real estate bubble was caused
> by political intervention in congress. Had government oversight legislation
> of Fannie and Freddie gotten through congress in 2003, at least 80%
> of this disaster never happens. Isn't the problem really just the
> imperfrections and bias of the mainstream media in >disseminating credible information.

The real foundation of the crisis we are facing is a matter of generational dynamics. It has been so long since we have seen a real recession or depression or had to wonder how we were going to keep a roof over our heads or put food on the table that we truly came to believe that it could not happen again. We truly came to believe that we could endlessly flip houses and make money. We came to believe that w were geniuses who were masters of the universe, or at least the stock market.

In short, it was our own ego, greed and stupidity that set us up for this fall. We have no one to blame but ourslevles and those who insist on only placing the blame on someone else are doomed to continue repeating the mistakes they have made.

'The Crash of 2008 and What It Means' by George Soros

Mon, 13 Jul 2009 12:16:01 -0400

The "theory of reflexivity" is nothing new. If one understands that markets, especially the American stock market, is not something out there, separate from us, that it IS us, all of us, then you have the basic foundation needed to grasp this concept.

Most people either don't have the intellectual brainpower to grasp such an idea or prefer not to work hard enough to uncover truths such a this and so they remain one of the sheeple who get fleeced on a regular basis by the powers that be.

In dealing with such a "complex" theory, IMO, it is important to have a grasp of the real factors that control group thinking. I would start with understanding the two basic motivators: fear and greed. Learn to step outside of your own fear and greed and you will learn how to profit and even be a means of support for a system in panic. What? Only those who were able to see opportunity in the panic on October 10th, 2008, kept the entire stock market from crashing to a point of no return.

Read about "The Fourth Turning" and "Generational Dynamics" and understand demographics PRIOR to making investment decisions and you will have a HUGE advantage over the typical investor who plays hunches and follows the crowd.

Finally, to be a succesful investor, don't get caught up in specific data points too much and don't be married to a position of bearishness or bullishness without regards to the facts. As an investor, if you are going to be married to something, marry the truth.