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Stock Market Wisdom Of Old For A Paranoid Trading Pit

Markos Kaminis profile picture
Markos Kaminis


  • The stock market is a barometer of investors’ estimated risk and reward for investment in equities.
  • Given recently disruptive news flow, volatility has intensified, and stock performance has stagnated.
  • Long-term investors should follow the wisdom of old and focus on the path of the economy and corporate earnings, both of which are improving substantially.

The stock market is a measuring stick or a pricing mechanism, incorporating daily data and weighing factors constantly towards value estimation. Lately, it seems to be getting in its own way, though, acting more like a paranoid person than a reasonable man. There are various substantial reasons for that, but I suggest investors remember the wisdom of old and not get caught up in the daily fear and greed that drives very short-term moves in markets. The long-term investor needs to keep perspective and control emotions even when the news seems to demand otherwise. But is this time different?

Stocks Missing a Positive Presence

It feels like since Gary Cohn left the Administration in early March, data flow and decision making from Washington has been a bit less market-friendly. The chart of the iPath S&P 500 VIX ST Futures ETN (VXX) reflects the uptick in volatility since the message from the Oval Office shifted from fruitful tax reform legislation and infrastructure spending to troubling tariffs, trade wars and nuclear negotiations. While it’s all being driven by good intentions, the uncertainty and noise it stirs into the soup is terrifying nonetheless to a stock market that must measure risk and reward. Investors are on edge, which does not help judgement when the Federal Reserve makes a communique or when it drives our trading partners’ rough rebuttals.

Over the past several weeks, we have seen China and Iran stand strongly against our forceful advances, partly because there seems to be a growing opinion that the bark of our policies is not backed by bite; that it is simply a negotiation tactic. That troubles me because I wonder if it might lead to an actual dog fight. Iranian leaders just warned that a U.S. withdrawal from the Nuclear Deal with

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Markos Kaminis profile picture
Markos N. Kaminis generated a 23% average annual return on "Strong Buy" stock selections over 5 years while working as a Senior Equity Analyst on Wall Street. As an internal whistle-blower, I sacrificed absolutely everything to do the right thing. And despite being an eyewitness and victim of terrorism on 9-11, I am currently volunteering at a busy border crossing helping Middle Eastern & North African refugees, most displaced by war or other horrors, to land safely in Europe. Despite my life experiences, I still have hope, and believe that we must persevere with patience (forgiveness), tolerance and love. I have determined to struggle for the better good of my brethren rather than for myself, and you'll see that play out over the course of the rest of my life. But I worked far too long and hard to become an excellent stock-picker to not incorporate this work into the fold. Markos N. Kaminis generated a 23% average annual return on "Strong Buy" stock selections over 5 years and ranked 2nd among a group of 60 analysts in-house as a Senior Equity Analyst over a seven-year period at Standard & Poor's. After proving his value in-house, he was promoted into a special role as an idea generator, supporting the portfolios of institutional clients as well as driving performance within S&P's recommended lists and portfolios. At times, Markos was responsible for up to 10% of the firm's entire "Strong Buy" list and is due a great deal of credit for the group's outstanding performance during his tenure. Markos followed a group of 30-40 Small and Mid-Cap firms, and was charged with finding new buy and sell candidates across industry sectors. He generated a 23% average annual return over five years on his "Strong Buy" recommendations, and 26% over three years ended 2004. He was ranked 1st of 60 analysts in-house for his "Strong Buy" performance over 4 years (2nd over 5). Markos also authored IPO research and wrote for high-level newsletters, The Outlook, Equity Insights and Emerging Opportunities, as well as for BusinessWeek Online. He represented his firm as an analytical expert commentator for major media, including television, Internet and through quotes and interviews in reputable publications. Besides predicting the stock market correction of 2015 through a series of prescient reports here in August. (see proof here: http://seekingalpha.com/article/3482226-investor-who-predicted-the-stock-market-correction-offers-an-update ), Markos also advised investors to buy stocks at the bottom of the market in mid-February 2016 and again post-Brexit at the trough, and to buy gold in January 2016 before the commodity started its move higher. More recently, he called the pickup in the economy for 2018, the upward move for stocks in 2018, and the breakout in oil, starting in June of 2017. See: June 15, 2017 – Buy Oil Back Now; August 1, 2017 – Why Oil Prices Will Break Out – The Demand Driver; September 30, 2017 – Why Oil Prices Can Break Out Part II: Vulnerable Supply; and January 26, 2018 – Up 44% Since Our June Bullish Turn – Oil Still Supported Here. While not perfect, over the years, Markos has made countless correct market and security calls for his followers, including forecasting the demise of J.C. Penney on the heralded CEO hire's disruptive plans, the bankruptcies of Washington Mutual and Pilgrim's Pride in the $30 and $20s, respectively, as well as the purchase of Facebook in the mid-$20s when it was considered a pariah post its IPO (today it is a market darling). Markos also warned of the real estate market collapse and the financial crisis in the early days of his blogging. What I personally want you to know about my plans: After witnessing the worst of Wall Street firsthand and having the ideal vision of my childhood career choice corrupted by reality, I almost switched to full-time charity work at age 40 and still have plans for several non-profit endeavors. The future is somewhat unknown, and I am open to employment offers for portfolio management or other ideas. While continuing to publish regularly, I expect to begin work on several book ideas that I believe are important for business, for our nation and for society. I may put  my stock selection skills, earned through blood, sweat and tears, to better use, and to make my own way. I would like to give investors something rare, a dignified partner who can manage money with integrity and a clear conscience about the degree of due diligence behind investment decisions... someone who cares more about your money than your wife. I hope readers will become followers of my column here & at my blog, so that when our numbers are substantial, we might start an investment fund or two. Prior to his Wall Street career, Mr. Kaminis spent time in the back-office, as a mutual fund accountant, where he managed for a time the work of two men. Before this, from age 11 to age 25, he worked as a carpenter's apprentice and carpenter with his father, in both commercial and residential projects. Mr. Kaminis has an intimate knowledge of the real estate (undergraduate degree in Real Estate and Finance) and construction market, as well as the restaurant industry. However, as a generalist stock analyst, he showed the ability to learn any and the most complicated of industries in short time - and he gamed every challenge presented to him. Mr. Kaminis earned his MBA at the Katz Graduate School of Business at the University of Pittsburgh, and his BA at Temple University in Philadelphia. However, Markos has been studying the stock market since age 13, when he determined his career path. He made his first investment at age 16, and funded much of his undergraduate education with the proceeds of his investing success. Mr. Kaminis continues to keep busy forecasting the economic path and securities market activity. Markos is considering the eventual start-up a long/short capital appreciation hedge fund. Such a fund would limit risk through beta reduction, using a diversification strategy targeting sector & industry and long & short position inclusion. At the same time, Markos' theoretical fund would seek maximum capital appreciation through the exploitation of Mr. Kaminis' inherent economic & market discernment gift and proven stock selection skills. Mr. Kaminis also has a team of a select few analysts, technicians, strategists and economists that he has been impressed by over the years, which he expects to tap for the project when the time is right. Mr. Kaminis welcomes your interest in such a potential forward effort, and looks forward to discussing his plans with those appropriate and within legal constraints. Markos toys with very early stage entrepreneurial efforts in the testing of certain business models, all of which he intends to tie to a planned non-profit project serving the most helpless among us. The tie will be that the businesses will give employment opportunity to individuals who would otherwise have difficulty finding gainful employment. It will house and heal the homeless, ex-convicts, those completing rehabilitation efforts for drug and other addictions, and others in need of help. Markos is currently Directing the widely syndicated blog he founded, "Wall Street Greek," and is writing for other well-known publications besides advancing several big ideas. Markos' column is syndicated across sites like the Boston Globe, Kiplinger Magazine, UPI and other reputable newspaper and TV websites, as well as private networks, Amazon Kindle, iPhone and more. In the past, he has written for RealMoney.com, Motley Fool and others. Requests to research specific companies are welcome, as we serve our readers. You may contact us via this blog's contact info. Mr. Kaminis welcomes you to follow him here at Seeking Alpha, where he is proud to be a long-time contributor to this strong team of writers. He considers the Seeking Alpha team and management close friends, and for you, people worth knowing and following. Visit his site: Wall Street Greek (http://www.wallstreetgreek.blogspot.com/)

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (10)

JSHIII profile picture
This is an awesome article. 30 years ago almost everyone was a buy and hold investor like two brilliant men: Buffett and Munger.

Today, 90% of all trading volume is short term gambling-- gamblers lose to the House and the Wall Street House is the market makers.

So for all you gamblers who watch CNBC's Fast Money understand you are being played. Wall St is now a casino and you are the poor suckers.
Nicholas Southwick Levis profile picture
Leverage cuts both ways. Right now, everything is awesome, and we have a pro-corporation anti labor government and Fed. Wage slaves are getting little to no benefit out of all of the debt and buybacks.

Sure, the national debt is not as high as Japan's, but off balance sheet liabilities like Medicare and Social Security along with derivative exposures and corporate debt make things a lot riskier than they look. Your reasoning is sound for now, and I suppose we could sell Yosemite, but in order to pay off the debt with those assets, we would have to gate capital controls and tax the top .001% at 25% of their wealth... Personally, I'm all for it. That 25% was basically stolen from labor via QE anyway. (communism for the elite)
Compared to the total value of America's assets our national debt is a drop in the bucket.
TraderTech profile picture
That may be true, but it's about liquidity. If China calls in its debts (our Treasuries), do we have $1T+ liquid to pay them with? Or are we going to sell our parks to pay them? If another 2007-8 financial crisis occurs, where's the bailout money going to come from? Probably from IRAs & 401Ks, as the government forces those to buy their bonds. We'll only be able to print new money for so long before it sets off hyperinflation.
What if you apply History Repeating Itself Strategy?

#1) Que Sera Sera Part I:

Debt/GDP went up to 118% in 1946 post WWII.
Longest and most expensive war in history.

- Dow Jones collapsed -52% during WWII.

Massive QEs post WWII, sorry ... Marshall Plan, i mean.

That was the time when the economy was suffering Deflationary Pressures bad for business good for consumers. Also Extremely Low Interest Rates bad for savers good for borrowers.

Dow Jones rallied 970% from 1942 to 1965 (= 23 years).


Debt/GDP went up to 105% now post Iraq/Afghan Wars.
Longest and most expensive war in history.

- Dow Jones collapsed -54% during Iraq/Afghan Wars + GFC.

Massive QEs post GFC.

That was the time when the economy was suffering Deflationary Pressures bad for business good for consumers. Also Extremely Low Interest Rates bad for savers good for borrowers.

Dow Jones rallied 306% from 2009 to present (= 9 years).

#2.) Que Sera Sera Part II:

Dow Jones rallied strongly when P/E10 made breakouts.

>> Shiller P/E10 Breakout Strategy: http://bit.ly/2BUaPza

When P/E10 made a breakout in 1927, DJ gained additional 150% toward 1929 top for total 488% rally from 1921 bottom.

When P/E10 made a breakout in 1955, DJ gained additional 158% toward 1965 top for total 970% rally from 1942 bottom.

When P/E10 made a breakout in 1986, DJ gained additional 600% toward 2000 top for total 1,970% rally from 1974 bottom.

When P/E10 made a breakout in 2016, DJ gained additional 70% toward Jan 2018 ATH for total rally of 311% from March 2009 bottom. What should happen if P/E10 makes a breakout rally above the 1999 high of 44.19x, how far Dow Jones would have rallied overall?

#3.) Que Sera Sera Part III:

>> Breakout Investment Strategy: http://bit.ly/2FY0mEv

If you invested say $100k in 1955 after Dow Jones made a breakout rally above 1929 high; then you can retire luxuriously with $5.53 millions using DRIP Method for 40 years.

- DRIP Method: http://bit.ly/2cLCmDy

If you invested say $100k in 1983 when Dow Jones made a breakout rally above the Lost Decade of 1965 top to 1974 severe recession bottom; then you can retire luxuriously with $6.4 millions by now after 35 years of DRIP Method.


Breakout Strategies = Worked Great, if not the best.

>> The Impossible Dream: http://bit.ly/2G35QeI

You must be some kind of an oracle to be able to bottom fish World War II bottom with -52% discount in 1942; or be able to bottom fish the 1973/74 Severe Recession with -45% discount; or be able to bottom fish the 2008/09 Great Recession with -54% discount.

The only person i know who've done that is Warren Buffett who bought 3 shares of a company in 1942. Then bought low during the 1973/74 severe recession and 2008/09 great recession. Not exact bottoms, but close to the bottom run like in October to December 2008 when he started buying stocks left and right as if the world was going to an end.

- Investors Gaming Markets = 3.8% RRI;
- Buy and Hold Investors = 11% RRI; and
- Buy Low then Hold = 20+% by Warren Buffett.

That's for 30 to 50 years of investors' performances.

Good luck.
Great info but your overall point was lost on me...are you saying stocks are still a great investment, to hold them over the long term? thanks
Nicholas Southwick Levis profile picture
Ah yes, but to quote Andrew Grove, "only the paranoid survive" lol... someone had to do it...

Good article but remember that we have never had this much debt as a nation or in corp. Murrika. Long but not dogmatic is a fine approach, because it took until 1954 to breakeven after the crash of 1929 nominally, and we trade for a higher CAPE and price to sales than we did in '29...
mom n pops abounded in 1954 America, it's all corporations all the time now.
Buyandhold 2012 profile picture
"....holding stocks for the long term. Since 1928, investors count could count on that resulting in 10% annual returns on average."

Then why on earth do investors ever make the mistake of selling?

Can't figure it out.

90 years of 10% average annual returns.

And some stocks have done even better than that. Some stocks have averaged closer to 20% annual returns for at least 50 years.

Louis Rukeyser always used to tell investors to stay the course. Listen to him. The guy looked like George Washington.

Good article, Markos.
Why do I have the sneaking suspicion that content like this is sponsored by the powers that be who are motivated to unload lots of garbage as quickly as possible?
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