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Out-of-sync, Negative Pundits Are Getting Louder – So, Stay Positive

It’s called “fighting the tape.” In this market, that means bearish advisers and short-sellers who refuse to admit that they missed the boat. Good news and positive trends are dismissed or ignored, and new negatives are touted as the drivers of the next smashup, just around the corner. Here is one example…

 

I used to follow Gary Shilling’s writings carefully. His economic analysis was excellent, and he was often better at spotting trend changes than other economists. Now, unfortunately, he writes a “shock and awe” newsletter, Insights, that is a better contrarian indicator than information source.

Forbes (for whom Gary Shilling also writes) has a service that regularly sends out emails promoting a particular newsletter. I have been receiving their emails since last fall, and Insights has been promoted five times. The message is the same: doom and gloom, so sell your stocks. Hopefully, few investors heeded his past messages:

October 30, 2009

  • Subject: Get Gary Shilling’s Latest Forecast
  • Title: “Happy Days” Are Not Here Again
  • Advice: Don’t be sucked in by the herd-like rationalization for high-flying equities.
  • DJIA: 9,713

December 2, 2009

  • Subject: Shilling Says Sell This Rally
  • Title: Consumer Spending Won’t Save Us
  • Advice: So my advice is to take profits in stocks now while you still can.
  • DJIA: 10,453

January 29, 2010

  • Subject: Shilling: Sell Stocks Before It’s Too Late
  • Title: Take Profits in Stocks Now While You Still Can
  • Advice: So my advice is to take profits in stocks now while you still can.
  • DJIA: 10,067

February 16, 2010

  • Subject: Shilling: Sell Stocks Before It’s Too Late
  • Title: Take Profits in Stocks Now While You Still Can
  • Advice: So my advice is to take profits in stocks now while you still can.
  • DJIA: 10,269

March 16, 2010

  • Subject: Shilling: The Housing Crisis Isn’t Over Yet
  • Title: Take Profits in Stocks Now While You Still Can
  • Advice: So my advice is to take profits in stocks now while you still can.
  • DJIA close: 10,686

Notice that he, like other pessimistic pundits, now brings housing to the forefront. Even the press is filled with foreclosure “news” and dire predictions as if this were a new topic. It’s simply a step in the continuing search for something that could look bad and can get investors worked up.

Here’s the timing of all those “sell stocks now” promotions:

So, be wary of noisy naysayers. Loud, calamitous forecasts are a common reaction by pessimistic pundits being out-of-sync with the positive trends that follow a bear market.



Disclosure: No positions