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GaltMachine

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  • The JPMorgan Global PMI for December rises to 50.2 from 49.6 previously, the first time in expansion territory since May. New Export Orders contracted for the 9th consecutive month, but inventories continue to decline as well, suggesting at last some room for further expansion. [View news story]
    Another reason to be bullish. Suggests that the slowdown is turning into expansion again.

    Tough to be a bear with so much recent bullish econ data.

    I have to admit I am scratching my head a bit at the idea that the markets are celebrating what amounts to a pretty sizable tax increase on just about everyone who holds a job in the US. Not sure how that is a positive but we'll see.

    Perhaps it is a short squeeze.
    Jan 2, 2013. 01:04 PM | 2 Likes Like |Link to Comment
  • Have Asset Classes Really Become More Correlated Since The 2008 Financial Meltdown? [View article]
    bbro,

    Would bonds have had such a phenomenal run without the FED's ZIRP and QE's?

    I don't think so but that doesn't mean I haven't benefited from it. My bond holdings have had an incredible run since 2009. When they said they would do anything to hold down rates I believed them.
    Jan 1, 2013. 03:01 PM | Likes Like |Link to Comment
  • Have Asset Classes Really Become More Correlated Since The 2008 Financial Meltdown? [View article]
    This shows the fingerprint of the FED and all other central banks.
    Jan 1, 2013. 02:31 PM | Likes Like |Link to Comment
  • The House will not vote on a budget deal tonight, meaning at least a temporary step over the fiscal cliff. With the 2 sides reportedly near agreement, it may just be a technicality, but maybe not. Tax rates go up at midnight, making any vote after that time a vote on cutting taxes. [View news story]
    Explains why we heard not a single word from Boehner today. The Senate was trying to push the "it's a done deal" tactic to pressure the House into caving.

    Clearly without Nancy Pelosi's help there will be no deal in the House.

    Sometimes the obvious doesn't appear so obvious until it is.
    Dec 31, 2012. 04:56 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: What Lies Beyond The Cliff? [View article]
    "If a vote were to be allowed, my guess is that it would pass in the House with strong Democratic support and possibly a majority of Republicans."

    I don't think Nancy Pelosi is going to cooperate. I believe her political calculus is such that she sees a greater advantage politically speaking from non-cooperation unless the plan is exactly what the President has wanted all along. In that case, I can't see how Boehner brings it to a vote.

    Right now the shortest path to resolution would be to pass the existing House bill in the Senate and renew the tax rates for everyone for one more year.

    Would the President veto that?

    That would be a real shocker if he did.
    Dec 30, 2012. 11:58 AM | 1 Like Like |Link to Comment
  • Some 2012 lessons of investing don't look that unfamiliar: Risk did better than risk-off; don't fight the Fed (or the ECB); it's better to always buy cheap than to try to factor in market timing. What did you learn this year? [View news story]
    I also note one other lesson. Despite Bogle's pronouncements passive indexing doesn't always work even with the dividend.

    The S&P closed at 1402.43 on Friday.

    Interesting that the S&P500 closed at 1402.11 on Jan 5, 2000.

    Gives new meaning to the phrase sideways markets :)

    Hopefully the next 10 years is a win for the index crowd.
    Dec 30, 2012. 11:43 AM | 2 Likes Like |Link to Comment
  • Some 2012 lessons of investing don't look that unfamiliar: Risk did better than risk-off; don't fight the Fed (or the ECB); it's better to always buy cheap than to try to factor in market timing. What did you learn this year? [View news story]
    Don't let your political bias affect your investing strategy.

    Easier said than done of course, especially in my case :)
    Dec 30, 2012. 11:39 AM | 2 Likes Like |Link to Comment
  • The NAAIM Manager Sentiment survey soars to 88.1 - "literally off the charts bullish," says Schaeffer's Ryan Detrick, pronouncing himself concerned at so many professionals moved to one side of the boat. (longer-term chart[View news story]
    passive,

    I like a composite of various indicators including AAII. Investor's Intelligence and the OEX in addition to AAII are all showing pretty high bullishness but not extreme.

    http://bit.ly/xQNJ14
    Dec 30, 2012. 11:36 AM | Likes Like |Link to Comment
  • Dr. Marc Faber's Market Outlook For 2013 [View article]
    Joseph,

    The S&P closed at 1402.43 on Friday.

    Interesting that the S&P500 closed at 1402.11 on Jan 5, 2000.

    Gives new meaning to the phrase sideways markets :)
    Dec 30, 2012. 11:29 AM | Likes Like |Link to Comment
  • The NAAIM Manager Sentiment survey soars to 88.1 - "literally off the charts bullish," says Schaeffer's Ryan Detrick, pronouncing himself concerned at so many professionals moved to one side of the boat. (longer-term chart[View news story]
    Tack,

    "I am a firm disbeliever in market timing"

    We could have saved a lot of time with this discussion considering you are not interested in evidence to the contrary :)

    "much better correlated for pessimistic bottoms than with tops."

    That is exactly correct. We do agree. Only the extremes in either direction matter which means 95% of the time this data is noise. When this number get extremely bearish that's a fear gauge and means to quote Buffett:

    “Be Fearful When Others Are Greedy And Greedy When Others Are Fearful”

    Buying at the peak of bearishness on this data would have had you entering the market in April 09 and Oct 2011 (S&P at 1070) which I think would have been great "timing". Of course in hindsight it takes a lot of courage to buy at those times.

    I don't advocate this for particular stocks just the broad index which is the Bogle approach.

    Of all the "black magic, voodoo doctor" indicators out there, I think sentiment indicators are the most useful because they track demand for stocks so in that sense they are actually quite logical and believable. Prices rise when demand is strong and fall when demand is weak.

    Good luck in the New Year.
    Dec 29, 2012. 02:47 PM | 3 Likes Like |Link to Comment
  • The NAAIM Manager Sentiment survey soars to 88.1 - "literally off the charts bullish," says Schaeffer's Ryan Detrick, pronouncing himself concerned at so many professionals moved to one side of the boat. (longer-term chart[View news story]
    Tack,

    "one can note almost no correlation between the SPX and variations in sentiment"

    Did you click on the link?

    It does correlate very well with near market peaks as well as bottoms. The key to interpreting these reports is to look for the extremes in sentiment either bullish or bearish. In the chart above extreme bearishness corresponded with great entry points (March 09, last Oct 2011) and extreme bullishness with corrections (Oct 2007).

    So as a buy and holder this stuff probably doesn't matter but if you are an indexer who wants to buy in to the market you can time your entry points somewhat with this data and other indicators.

    Most of the time it is noise and provides no useful information but peaks in bullishness this high on this survey have been followed by sell-offs.

    "And, frankly, there's been a lot of good news reported lately, mostly ignored while fiscal-cliff phobia plays out in the media."

    That is true but as they say the economy isn't the market. In the short run emotions can have tremendous impact on the markets and this indicator is a reflection of the prevailing emotion at the time. In this case it is greed and apparently these professional investors agree completely with your viewpoint which is why they are so long equities.

    That doesn't mean you should sell but you might want to wait a little bit to buy. Generally a great time to buy is when these professional "investors" are fearful and selling rather than greedy and buying.
    Dec 29, 2012. 01:59 PM | 4 Likes Like |Link to Comment
  • The NAAIM Manager Sentiment survey soars to 88.1 - "literally off the charts bullish," says Schaeffer's Ryan Detrick, pronouncing himself concerned at so many professionals moved to one side of the boat. (longer-term chart[View news story]
    This is kind of freaky. These investors really do believe that the fiscal cliff issue is already priced in to the markets.

    We keep hearing how people are bearish, but which people? The people that invest or the ones that don't?

    Seems to me that what matters most are the actions of market participants rather than the mythical "money on the sidelines".

    This mirrors what's happened in the last few weeks with all the other investment sentiment indicators. This is one of those rare times when investors are lined up on one side and that usually means that we are in store for a correction if you believe this is a contrarian indicator.

    If you click on the link it has a nice graphic. That should set up a nice entry point, I think.
    Dec 29, 2012. 01:32 PM | 3 Likes Like |Link to Comment
  • Insider Monkey's Jake Mann takes a look at how Apple (AAPL -1.1%) invests its $120B in liquid assets. "Corporate securities" (either debt or equities) made up $46.3B of the total at the end of FY12, treasuries made up $20.1B, and U.S. agency securities $19.5B. Another $11.9B was invested in mortgage and asset-backed securities, $5.6B in muni bonds, and $5.5B in foreign government debt. Apple's treasury holdings rose 87.9% Y/Y, easily surpassing the 49% increase seen in its asset base (exc. cash). Corporate securities rose 31.5%. [View news story]
    AAPL is a fixed income fund as well. How interesting.

    I wonder what the duration of their portfolio is.
    Dec 28, 2012. 04:58 PM | 1 Like Like |Link to Comment
  • S&P 500 futures -0.3%, giving up overnight gains in the last couple of hours ahead of a last-ditch cliff-avoidance meeting today between the President and congressional leaders. Europe slides: Stoxx 50 -1%, led by Spain -1.7%[View news story]
    Tack,

    I read this article this morning on CNBC:

    http://bit.ly/10sfRJw
    "There's a common misperception about the fiscal cliff— that the tax increases only apply to 2013. Not true.

    In a cruel epilogue to 2012, roughly 28 million families would owe the IRS $86 billion more than they anticipated for this year should the country plunge off the cliff, according to the nonpartisan Tax Policy Center.
    Those families would face the "Alternative Minimum Tax," which was introduced in 1969 to supposedly guarantee that wealthy Americans could not elude the taxman. But the AMT not only flopped, it was never indexed to inflation. So with each passing year, it seeps away from high society and into the wallets of Target and Wal-Mart shoppers. That sets up a disaster for April 15."
    Dec 28, 2012. 11:25 AM | Likes Like |Link to Comment
  • Initial Jobless Claims: -12K to 350K vs. 365K consensus, 362K prior (revised). Continuing claims -32K to 3.23M. [View news story]
    bbro,

    Read this from Hedgeye this morning:

    http://bit.ly/10nkEvA
    "JOBLESS CLAIMS: MISSING PIECES

    This week’s jobless claims numbers had 19 states omitted from the data, including California and Texas. While the data is positive with initial jobless claims falling 11k to 350k from 361k, we wouldn’t put too much faith in this data and would wait and see what next week’s numbers hold. Hurricane Sandy is no longer affecting the numbers and claims are generally trending lower, the latter of which is a tailwind we should expect to continue through February."

    How do they handle missing states' data?
    Dec 27, 2012. 10:21 AM | Likes Like |Link to Comment
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