Angel Martin

Individual Investor Challenge: Can You Succeed by Going It Alone?

I think there are a lot of disadvantages to going it alone:

-time: there is so much reading to keep on top of that it's hard to compete with professionals that do it full time.

-what's your edge? If you are actively managing and trading, you are likely not trading against the folks Jay Leno has on "Jaywalk" or some of the more clueless posters on SA. The stock market is not like a poker game where you know who the opposition is. What is your edge against the professionals (likely) on the other side of the trade?

-avoiding the "pseudo edge": after a big meltdown like 2008, there are a lot of investors who lose faith in mainstream investment strategies and are looking for an alternative. At the same time there are a lot of "broken clocks" who achieve temporary popularity for their noisy critiques of the investment status quo. The problem is that most of the broken clocks don't understand basic diversification/risk management and advocate extreme asset allocations that have proven very risky in the past (goldbugs, I'm pointing at you). If investors fall for the "pseudo edge" that the fringe gurus aim to provide, they are likely setting themselves up for further losses.

-professional detachment: there is substantial research showing fear makes for poor decision making; having a professional make the buy/sell decisions let's them trade without that fear of loss of wealth. Maintaining a target asset allocation last fall required selling bonds to buy stock as the market went down - a tough trade.

-sounding board: if an individual investor is going to try something that is contrary to the standard asset allocation, more than anyone that investor needs to have a sounding board to give a critique. If you do it yourself and trade online there is no broker or wealth manager to say, hey that's a very risky strategy...

I think you can make an argument for a go it alone approach for say 5-10% of portfolio, but I think the asset allocation discipline, emotional detachment and research economies of scale suggests to me that professional money management is worth the 1.5%.

The Confusing Connection Between M2 and Inflation

Thankyou for this article.

It's especially useful for those of us who have been assuming disinflation/deflation would predominate for the next few years.

A lot to think about.

First Stocks, Then the Economy...Is Job Growth Next?

Excellent article!

The points made in this article about the timing of recovery, and the sequence of events in a recovery, needs to be read over and over by doomers and goldbugs.

As this article pointed out, timing and sequence this time is the same as all the other times.

It is not "different this time", it's the same as it always is.

Is Gold Bound to Fall?

Hey, using the author's logic, why not value tech stocks based on Feb 2000 stock prices?


On Dec 15 12:55 PM ValueInvestor wrote:

> Your analysis boils down to the current price vs the all-time high?
> ZZZzzzZZZzzz... As a long time commodity trader, all I can do is
> sit back and laugh.

An Unbelievable Investment Opportunity in Gold

That's why there are two sides to every market.

To repeat, we have multiple months of growth in: wholesale, retail, imports, industrial production, gdp. That's in addition to the market up and a steep yield curve.

When november employment is revised, it will almost certainly be plus as well.

My question to all goldbugs: if people like me are right and we are into a normal-self sustaining recovery, what is the likely price target for gold?


On Dec 15 10:26 AM DiverCity wrote:

> "All" the major economic indicators now show many consecutive months
> of improvement, you claim? I grant you that certain economic measures
> have improved -- an important one being GDP. However, even reasonable
> bullish analysts will concede that the improvement there is dependent
> wholly on government stimulus. No one can correctly claim that GDP
> growth has resulted from private economic activity. Moreover, most
> "economic indicators" have not improved. Rather, their rate of decline
> has simply decelerated. This does not mean things are better -- just
> that they aren't getting bad as quickly. (Why can't most people see
> this?)
>
> It is my opinion that the improvement in certain markets (for example,
> equities) is what you are really looking at and you have extrapolated
> from there. This is what the government and Wall Street want you
> to do in the (vain?) hope that animal spirits will be rekindled and,
> as a result, real, positive private economic activity will take over.
> Perhaps that will happen. I don't know. I think it could go either
> way but we're still on the precipice and if you'd simply turn around
> you too could see the abyss. However, it appears that you're in denial.
> And the conclusions that you have already drawn are, at this point,
> unsupported in the main.
>
> Others acknowledge that there's an abyss and that is why gold will
> IMO continue to go up when priced in dollars.
>
> On Dec 15 09:53 AM Angel Martin wrote:

An Unbelievable Investment Opportunity in Gold

The value of gold rises when there is fear of economic and financial collapse. When normal economic conditions are restored, the value of gold plunges.

The doom and gloomers and goldbugs believe depression is just around the corner, even though all the major economic indicators (gdp, retail, industrial production, imports, employment) now show many consecutive months of improvement.

The doom and gloomers have become increasingly disconnected from reality and are resorting to conspiracy theories to explain away favourable economic data.

I guess a preference for conspiracy theories by doomers should not be a surprise, as goldbugs have claimed for years that their favourite investment is being manipulated and the price supressed.

Gold must be the only "investment" where many of the bulls believe that the market is rigged against them, yet they continue to buy!

I agree with the author that gold presents an unbelieveable investment opportunity - short.

100 Years of Inflation

That's a really useful graph in this article.

The comparison between the 1990's and 2000-2009 is really striking. Despite the claims about high inflation in 2000+, the average inflation in that decade is lower, and peak inflation is lower, than the 1990's.

China's Big Gold Story

Go for it. Down 10% and only 65% more to go!

What Are Some Market Risks for 2010?

This author has been totally wrong for 9 months, so he doubles down on gloom and doom for 2010...?

I think the major risks for 2010 are political, especially regime disintegration in Iran and North Korea.

The end of those dictatorships would be a huge benefit for their populations, and reduce the risks of wmd use. However, there is a big risk that neither of those regimes will "go quietly".

U.S. Economy Gathering Momentum for Renewed Expansion

I think this recession was more like 1920-21, than anything else.

The 1920's analogy suggests a point about long term treasuries. Investors in 1922 were surprised at falling yields on long term treasuries during the first stage of an economic recovery. But in a disinflationary environment (such as 1922, and i believe, today) treasury yields might not rise as much as expected. Long Treasury yields fell pretty much throughout the 1920's.


On Dec 14 11:34 AM Tom E. wrote:

> I wonder if this recession is more like a "panic" like in 1819 or
> 1907 than a depression. It happened so quick, it sure seemed like
> a panic.

Wall Street's most accurate forecasters - this year, anyway - are calling for an 11% rally in the S&P 500 next year. JPMorgan Chase's Thomas Lee expects the index to go to 1300, and Goldman Sachs' (GS) David Kostin expects 1,250, on low rates and profit growth of more than 26%.

I'll take the over on 1300

Recession Ends for Summers: Anyone Else?

This article is silly. The "end of the recession" doesn't mean we instantly go back to 2007Q3.

What it does mean that there is across the board growth in GDP, industrial production, employment, retail etc.

There were major drops in all these measures, and it will take time to get back to pre-recession levels.

Given the large revisions to sept and oct, when Nov employment is final it will almost certainly be growing. The other major indicators all have multi months of growth.

Accenture (ACN) severs its ties with Tiger: "Given the circumstances of the last two weeks, after careful consideration and analysis, the company has determined that he is no longer the right representative for its advertising."

Well deserved.

A guy who fakes a "family man" image while carrying on with pornstars doesn't really bring much to any legit business I can think of.

Yield Curve Steepest Since 1980; Hard Times Ahead in 2010

Mr Shedlock used to be one of the biggest deflationists around. Now he is writing about inflation fears driving bond yields higher?

Of course, even thought his inflation and interest rate scenario has changed 180 degrees, Mr Shedlock is still predicting doom for the economy and the stock market.

Wrong for 9 months on the market, in denial and resorting to conspiracy theories to explain away favourable economic data, probably time to put send this guy to the same place as Zerohedge.

November Retail Sales: Deeply Skeptical

Imports cannot be faked because they are someone else's exports.

Imports are strongly correlated with GDP.

Imports are up...


On Dec 11 12:48 PM Silentz wrote:

> So, if at first you don't succeed, change the rules? Perfect. Par
> for the course anymore.
>
> The worst part of this whole "green shoots" baloney is that I don't
> trust ANY numbers coming from our overlords. Not a single one. And
> that's kinda depressing.
>
> But then again, it makes me do my own research to learn the real
> truth, so I guess there is a silver lining. Now if we could convince
> the rest of the sheep to do the same thing, we'd be all set.