Forecasting The Market: A Thought Experiment Revisited [View article]
Doug,
I find your exercise interesting. Nevertheless, the vast distance between the two scenarios makes the output probably non-actionable. Perhaps, in order to get a useful comparison, it would be good to see were the you actually think the S&P would end up and then see were it actually ends up.
Clearer Communication In The Wrong Quarters [View article]
You made me laugh, Mike. Maybe you were simply getting used to the huge amount of traffic your previous post generated. Highly charged politics, a confrontational issue and controversy can do that.
I, for one, I am happier reading today's post and avoiding the whole degenerating cycle of nonsense political back and forth. For whatever is worth, in my opinion, there aren't many knowledgeable and articulate authors in SA that truly provide value to novice and, as it is my case, professional investors. You are one of them. That's why I read and appreciate your posts.
Higher Taxes On The Rich Would Barely Dent The Deficit [View article]
I think that the President should ask Bill Clinton and Mitt Romney to work together in finding a brad, deep and long lasting solution that should not only avoid the fiscal cliff but also set the proper path to a surplus.
It is almost inevitable that such solution would disappoint the parties' bases and those keen on maintaining total lack of flexibility. Nevertheless, both figures are widely respected by their parties and would easily be able to obtain sufficient support for a joint solution.
Clearer Communication In The Wrong Quarters [View article]
"Right now there is an enormous loathing for commodities that I don't really understand."
The largest influence on commodities' pricing is, by far, China. China's monumental appetite for commodities accounts for 20% to 40% of the world's commodities consumption (outside oil and depending which individual commodity you measure). China's GDP growth has slowed down from around 12.5 to 7.4%, slowing down not only its short term commodity purchase pace but, perhaps more importantly, its infrastructure and investment rate.
With a smooth power transition behind it, I believe that 2013 will see stronger growth in China, as well as, renewed infrastructure investment and stronger internal consumption. All these factors will mean translate in higher commodities' prices.
Conservative Positions For A Liberal World [View article]
Mike,
The chances of a recession under Romney or Obama remain around 6%, which makes them irrelevant regarding this particular point. That's the reason I didn't mention either one of them. At this point, I see slow growth but do not see a recession coming.
I enjoy reading your posts but this time I must say that I believe that by politicizing your post you are doing yourself and your readers a disservice. A sad example is the low quality and mostly fact-less back and forth argumentation between you and some of your readers about climate change. This is an unnecessary and fruitless detour, which would be the laughing stock of the real climate change scientific community. Why go there in the first place here?
We all have our political opinions and I respect yours as much as anyone else's. However, when one's political views get in the way of objectivity not much good comes out of it. This is especially true for a professional investor. I suggest we all leave our political biases at the door, inject some pragmatism into the conversation, and concentrate on producing actionable and profit generating material.
Conservative Positions For A Liberal World [View article]
Oh, Mike, I am sorry to see that you have also fallen victim to the politicization in this particular post and, with it, the loss of objectivity.
Unfortunately, I don't have the time right now to explain or back up the following assertions, but I will leave them here nonetheless. We should be able to check back in a few months to see to their validity:
1. There will be no recession in 2013. The chances of a recession, measured by non-political, rules-based models stand at around 6%.
2. Greece will not leave the Eurozone. Greece being in or out is not just a numbers' game. The equation includes historical and sociopolitical issues that are part of the core of Europe. I believe you continue to vastly underestimate these sociopolitical factors present in Europe, which will prevent this from happening.
3. The fiscal cliff will be averted. There will be a revenue increasing component in the form of getting rid of loopholes, exemptions and deductions, alongside the spending cuts components. These two components will be acceptable to the significant players of both parties even if the parties' bases disagree (the Tea Party will be overruled).
In short, I believe that 2013 will probably end up being very different that what you present here. I may be wrong but I am not looking at these events from a preconceived political lens, but rather, through what it intents to be be an objective one; as an investor. I can live with that.
Even With A Fiscal Cliff Deal, Stocks And The U.S. Economy Will Unravel In 2013 [View article]
Dividends#1,
Thank you for your kind comments. I am glad you found my post useful.
To me, my job as investor and trader requires that I check my own biases at the door and try my very best to see reality in the most pragmatic way, understand the markets' perception of reality (which may, at times, differ substantially from it) and act accordingly to profit from it.
My own political views must remain solely that, otherwise I risk they impair my judgement as an investor. As you can see, this frequently happens.
I try to always remember this: One should never be more invested in being right that in making money!
Even With A Fiscal Cliff Deal, Stocks And The U.S. Economy Will Unravel In 2013 [View article]
My Global Macro fund is fully invested, worldwide, including Greece, Spain and Portugal and, naturally, the US. In all four (and almost everywhere else), we are up significantly.
The circumstances and realities of Greece, Spain and Portugal are vastly different from those in the US. None of those countries had stimulative policies to help them promote growth, and all were forced very early into the economic cycle (mostly by Germany and, earlier, by the IMF), to various degrees, into extremely harsh austerity measures, cutting off any possibility of a stable recovery. Greece, for instance, was forced to extend the retirement age, cut salaries by 25% and pensions by 30%, just to mention a few. As a result, it has experienced a 5 year long recession. A depression, really.
The US, on the other hand, experienced a short but deep recession followed by a long period of slow growth. The stimulative policies did their job by bringing the US out of recession and promoting growth. Slow growth, yes, but growth nonetheless. Now, the country's economy has picked up, the housing market has bounced back, liquidity is plentiful, the banking system is healthy, companies have enormous amounts of cash available, exports are up significantly, in short, the economy is stable and robust.
Slow growth, even very slow growth doesn't become a recession. That's not the way it works. It would take an unforeseen event of substantial magnitude to take the US back into a recession. It is not going to happen.
It is your prerogative to believe that I am "absolutely foolish," but I am confident that I have an objective and detached view of the US and global economies based on proper research and due diligence, which tells me that there will not be a recession in the US in 2013.
And, yes, I will follow your advise and stay fully invested. That's my job.
Even With A Fiscal Cliff Deal, Stocks And The U.S. Economy Will Unravel In 2013 [View article]
"A recession and stock market correction in 2013 seems almost inescapable based on common sense."
Based on common sense. Seriously? In spite of all the gloom and doom from articles like this one, there will be not recession in 2013. Slow growth, yes. Recession, not a chance.
Our friends from Goldman Sachs who are sticking to their end-of-the-year forecast of 1250 for the S&P, a massive 10% drop even from current levels, have no qualms with putting out studies to support their view.
I won't be the judge of the validity of their studies but, are we seen a repeat of their 2008 scheme when their brokers peddled MBS to their clients while, at the same time, GS shorted them itself? Are they now telling their clients to sell while building up a long position themselves at better prices?
Still No Sign Of Labor Market Deterioration [View article]
Perhaps they will prove to be both in the long term. Perhaps they are not as efficient as they could be. Nevertheless, in the short term they are definitely stimulative and there is no way they make the economy sluggish.
Healthcare REITs Should Perform Well Under Obama [View article]
Thanks. I am not personally concerned with the tax implications and usually prefer to simply pick the best, most liquid, most direct investment vehicle, which are more likely to outperform in the long run.
Forecasting The Market: A Thought Experiment Revisited [View article]
I find your exercise interesting. Nevertheless, the vast distance between the two scenarios makes the output probably non-actionable. Perhaps, in order to get a useful comparison, it would be good to see were the you actually think the S&P would end up and then see were it actually ends up.
Clearer Communication In The Wrong Quarters [View article]
I, for one, I am happier reading today's post and avoiding the whole degenerating cycle of nonsense political back and forth. For whatever is worth, in my opinion, there aren't many knowledgeable and articulate authors in SA that truly provide value to novice and, as it is my case, professional investors. You are one of them. That's why I read and appreciate your posts.
Higher Taxes On The Rich Would Barely Dent The Deficit [View article]
It is almost inevitable that such solution would disappoint the parties' bases and those keen on maintaining total lack of flexibility. Nevertheless, both figures are widely respected by their parties and would easily be able to obtain sufficient support for a joint solution.
Clearer Communication In The Wrong Quarters [View article]
The largest influence on commodities' pricing is, by far, China. China's monumental appetite for commodities accounts for 20% to 40% of the world's commodities consumption (outside oil and depending which individual commodity you measure). China's GDP growth has slowed down from around 12.5 to 7.4%, slowing down not only its short term commodity purchase pace but, perhaps more importantly, its infrastructure and investment rate.
With a smooth power transition behind it, I believe that 2013 will see stronger growth in China, as well as, renewed infrastructure investment and stronger internal consumption. All these factors will mean translate in higher commodities' prices.
The Stock Market Rebound Is Coming [View article]
Conservative Positions For A Liberal World [View article]
The chances of a recession under Romney or Obama remain around 6%, which makes them irrelevant regarding this particular point. That's the reason I didn't mention either one of them. At this point, I see slow growth but do not see a recession coming.
I enjoy reading your posts but this time I must say that I believe that by politicizing your post you are doing yourself and your readers a disservice. A sad example is the low quality and mostly fact-less back and forth argumentation between you and some of your readers about climate change. This is an unnecessary and fruitless detour, which would be the laughing stock of the real climate change scientific community. Why go there in the first place here?
We all have our political opinions and I respect yours as much as anyone else's. However, when one's political views get in the way of objectivity not much good comes out of it. This is especially true for a professional investor. I suggest we all leave our political biases at the door, inject some pragmatism into the conversation, and concentrate on producing actionable and profit generating material.
I am looking forward to your next post.
Conservative Positions For A Liberal World [View article]
Unfortunately, I don't have the time right now to explain or back up the following assertions, but I will leave them here nonetheless. We should be able to check back in a few months to see to their validity:
1. There will be no recession in 2013. The chances of a recession, measured by non-political, rules-based models stand at around 6%.
2. Greece will not leave the Eurozone. Greece being in or out is not just a numbers' game. The equation includes historical and sociopolitical issues that are part of the core of Europe. I believe you continue to vastly underestimate these sociopolitical factors present in Europe, which will prevent this from happening.
3. The fiscal cliff will be averted. There will be a revenue increasing component in the form of getting rid of loopholes, exemptions and deductions, alongside the spending cuts components. These two components will be acceptable to the significant players of both parties even if the parties' bases disagree (the Tea Party will be overruled).
In short, I believe that 2013 will probably end up being very different that what you present here. I may be wrong but I am not looking at these events from a preconceived political lens, but rather, through what it intents to be be an objective one; as an investor. I can live with that.
Healthcare REITs Should Perform Well Under Obama [View article]
Even With A Fiscal Cliff Deal, Stocks And The U.S. Economy Will Unravel In 2013 [View article]
Thank you for your kind comments. I am glad you found my post useful.
To me, my job as investor and trader requires that I check my own biases at the door and try my very best to see reality in the most pragmatic way, understand the markets' perception of reality (which may, at times, differ substantially from it) and act accordingly to profit from it.
My own political views must remain solely that, otherwise I risk they impair my judgement as an investor. As you can see, this frequently happens.
I try to always remember this: One should never be more invested in being right that in making money!
Even With A Fiscal Cliff Deal, Stocks And The U.S. Economy Will Unravel In 2013 [View article]
The circumstances and realities of Greece, Spain and Portugal are vastly different from those in the US. None of those countries had stimulative policies to help them promote growth, and all were forced very early into the economic cycle (mostly by Germany and, earlier, by the IMF), to various degrees, into extremely harsh austerity measures, cutting off any possibility of a stable recovery. Greece, for instance, was forced to extend the retirement age, cut salaries by 25% and pensions by 30%, just to mention a few. As a result, it has experienced a 5 year long recession. A depression, really.
The US, on the other hand, experienced a short but deep recession followed by a long period of slow growth. The stimulative policies did their job by bringing the US out of recession and promoting growth. Slow growth, yes, but growth nonetheless. Now, the country's economy has picked up, the housing market has bounced back, liquidity is plentiful, the banking system is healthy, companies have enormous amounts of cash available, exports are up significantly, in short, the economy is stable and robust.
Slow growth, even very slow growth doesn't become a recession. That's not the way it works. It would take an unforeseen event of substantial magnitude to take the US back into a recession. It is not going to happen.
It is your prerogative to believe that I am "absolutely foolish," but I am confident that I have an objective and detached view of the US and global economies based on proper research and due diligence, which tells me that there will not be a recession in the US in 2013.
And, yes, I will follow your advise and stay fully invested. That's my job.
Even With A Fiscal Cliff Deal, Stocks And The U.S. Economy Will Unravel In 2013 [View article]
Based on common sense. Seriously? In spite of all the gloom and doom from articles like this one, there will be not recession in 2013. Slow growth, yes. Recession, not a chance.
Debunking The 100% Recession Chart [View article]
Our friends from Goldman Sachs who are sticking to their end-of-the-year forecast of 1250 for the S&P, a massive 10% drop even from current levels, have no qualms with putting out studies to support their view.
I won't be the judge of the validity of their studies but, are we seen a repeat of their 2008 scheme when their brokers peddled MBS to their clients while, at the same time, GS shorted them itself? Are they now telling their clients to sell while building up a long position themselves at better prices?
Still No Sign Of Labor Market Deterioration [View article]
Healthcare REITs Should Perform Well Under Obama [View article]
Still No Sign Of Labor Market Deterioration [View article]