rolfnorfolk

Through the Looking Glass: Alice in Liquidity Land

Bears can make a profit. I listened to the contrarians and set up a small regular premium mutual fund-based commodity investment for my wife, between Feb 2005 and October 2006. (Small because I'm British - they don't let us keep much of our money here). Annualized average return since commencement, after charges: 33%; since November 2006 even faster: 45% annualized. Wish I had more to put in, but I've had to pay my tax bill today. A bear in one sense is a bull in another.

If there's a market shakeout, I would expect this investment not to drop as much, because it's in tangibles with intrinsic value; and if (as many expect) helicopters start to drop dollars to compensate for recession, I would then expect it to soar.

Read my blog "Bearwatch" at theylaughedatnoah.blog... - a financial digest following bearish experts like Michael Panzner, Marc Faber, Jim Puplava etc.

The Smell of Contagion Hits Wall Street

In response to John's fair comment: Marc Faber repeats the old investment adage, "you don't give a price and a time frame together". If certain soberly-dressed individuals informed me they intended to firebomb my favourite club at some point, I wouldn't attempt to time my exit to within five minutes.

Michael is looking at straws in the wind. When they're heading at us from all directions, I guess Dorothy will certainly have to head for the cellar, but you don't always get that last-moment warning. Others are saying the same: Marc Faber, Richard Daughty, Richard Duncan, James Kynge and so on.

If you're one of the gunslingers who makes a profit right up to the crash and is the first out, well done - I haven't the nerve and admire those who do. I tend to exit early: Easter 1987, summer 1997, summer 1999 - not that I'm that clever (or rich), I just read and listen to contrarians as well as the happy canaries of the popular media. I missed getting back in in 2003/4, but without much regret - I think the support frame of the switchback is rotten.

For more in the same Eeyorish vein, please see my Bearwatch blog at theylaughedatnoah.blog...

Barron's Mid-2007 Analyst Roundtable

Interesting to see Marc Faber's prediction of a consumer slowdown. As I say in "Bearwatch":

That may reduce the monthly trade deficit for a while, but won't turn it into a surplus. China's ultra-low wage costs, combined with what seems to be very loose enforcement of intellectual property rights, are still set to hollow out Western industrial production of all kinds, as James Kynge's book makes abundantly and frighteningly clear.

It's all very well finding ways for individual investors to benefit, but if you haven't got spare money to invest, you can't back the winner in this unequal contest. Without some degree of prosperity, what real peace will our countries have? I'd like to see a credible national economic plan from our politicians.

theylaughedatnoah.blog...

Goodbye to the Good Old Days of Complacency and Stabilization

A straw in the wind, or the one that breaks the camel's back? As I say in my Bearwatch blog, "Naturally, each day that disaster doesn't strike is taken as further confirmation that Panzner is wrong. I shouldn't count on that: exact timing isn't possible, but I haven't seen a refutation of his threat analysis, or a relatively painless solution."

theylaughedatnoah.blog...

Another Perfect Storm Brewing: Government Underwritten Contingent Liabilities

Our governments appear to have entered the bunker-fantasy stage. Michael pursues his themes with commendable tenacity and increasing plausibility.

theylaughedatnoah.blog...

Cracks in the Wall Street Ice - Bull Run Coming To an End?

Well, you're right that timing is unpredictable, which is all the more reason to err on the side of caution. But some kind of prdiction is possible, I think: before I was in the industry I asked my broker to liquidate my investment with him in summer of 1987; I spoke and wrote to clients suggesting switching to cash pro tempore before the Far East debacle in 1997 and switched my wife's pension to cash at the same time; and warned another client to do so with his pension fund in 1999 (he listened, thank goodness). You can't get it exactly right, and who would have guessed that the Federal Reserve would throw so much wood on the fire after 2001? The wood's hot now. If you don't believe Michael Panzner, try Peter Schiff and Richard Duncan - the situation is an accident waiting to happen.

Cracks in the Wall Street Ice - Bull Run Coming To an End?

I think Michael is right. We've been at this stage before - a determinedly happy song bawled over a sad tune. According to investment managers, it's always a good time to give them more funds. Apart from the noble Buffett, when do they tell you to sell? Before the dot com crash, we had an upbeat presentation from a leading British fund management outfit, explaining that the tech boom was soon to be followed by a super-boom. We hadn't seen nuthin' yet. It was at this point that I began to suspect that the function of broker reps is to repair the cashing-out by their existing, smarter clients with new money from suckers, with the assistance of naive personal financial advisers.

I have launched a new site specifically to promote the views of bears like Mr Panzner, so that my clients and the investing public generally can have fair warning to reconsider their attitude to risk. I've called it "Bearwatch" and you'll find it at theylaughedatnoah.blog...

New York Fed President Timothy Geithner Tells It Like It Is

Quite right. I comment in detail via my blog - theylaughedatnoah.blog... - and does anyone else here think China is quietly preparing to make major moves?