The following quote was posted by Isaiah64v4.
That quote really resonated with me. In fact, it appears to me to be the basis of the entire market.
I'm only now hearing some pasting of labels on this market as a bear market. Gary K is openly calling it a bear. He's not done that on the other two corrections. On the contrary though, Robert McHugh on Saturday's FSO thought that there was a bullish non-confirmation of Dow Theory. And, there's Richard Russell who is now calling this a bear market in his letter dated 11/23/07 to his subscribers. Jeffrey Saut relayed these comments here. I urge you to read--indeed print--them. There's a bit of irony in these comments in that Richard Russell who was initially calling for a correction earlier this year (as the bull market was long in tooth) initiated a "it's different this time" and capitulated believing that the bull could run forever. So pick a person and pick a position and act according to your pain tolerance!
If you want something that can run forever, get a hunting dog--they are built for endurance and exhaust their prey by persistent pursuit. Bulls aren't built this way, neither are bears. Neither goes on forever, though it is both seductive and dangerous to believe that they will.
All of the "things" that are now bringing this market down were known more than a year ago. That's how long it has taken the market to come to grips with the swirl of problems. It certainly was an important lesson for me to learn--and I think that is why the Soros quote resonated so loudly with me.
Just a hair over a year ago, I wrote this post about Marty Zweig's definition of a bear market. You might find it an interesting read.
I'm also reading some noise about stock buybacks. I hope that you will read Mish's article. I always thought it odd that company's would buy back their stocks at the top of the cycle when their share prices were at their highest. I've never believed that buying a stock back really helps shareholders. As a shareholder, I'd rather have a dividend--money in my pocket at a tax advantaged rate. Personally, I think that the stock buybacks were to manage earnings forward giving a slowing rate of growth. I would not be surprised to see some litigation around these stock buybacks.
Futures are up as I write. As Gary K states, a signature bear market is strong open and pitiful close! There's nothing wrong with being the hunting dog--be steadfast, keep your eyes open and nose to the ground. You'll find out if it is a bull or bear soon enough with your patience and caution--it cannot outrun you, but it can run over you.
George Soros quote, “Economic history is a never-ending series of
episodes based on falsehoods and lies, not truths. It represents the
path to big money. The object is to recognize the trend whose premise
is false, ride that trend, and step off before it is discredited."
That quote really resonated with me. In fact, it appears to me to be the basis of the entire market.
I'm only now hearing some pasting of labels on this market as a bear market. Gary K is openly calling it a bear. He's not done that on the other two corrections. On the contrary though, Robert McHugh on Saturday's FSO thought that there was a bullish non-confirmation of Dow Theory. And, there's Richard Russell who is now calling this a bear market in his letter dated 11/23/07 to his subscribers. Jeffrey Saut relayed these comments here. I urge you to read--indeed print--them. There's a bit of irony in these comments in that Richard Russell who was initially calling for a correction earlier this year (as the bull market was long in tooth) initiated a "it's different this time" and capitulated believing that the bull could run forever. So pick a person and pick a position and act according to your pain tolerance!
If you want something that can run forever, get a hunting dog--they are built for endurance and exhaust their prey by persistent pursuit. Bulls aren't built this way, neither are bears. Neither goes on forever, though it is both seductive and dangerous to believe that they will.
All of the "things" that are now bringing this market down were known more than a year ago. That's how long it has taken the market to come to grips with the swirl of problems. It certainly was an important lesson for me to learn--and I think that is why the Soros quote resonated so loudly with me.
Just a hair over a year ago, I wrote this post about Marty Zweig's definition of a bear market. You might find it an interesting read.
I'm also reading some noise about stock buybacks. I hope that you will read Mish's article. I always thought it odd that company's would buy back their stocks at the top of the cycle when their share prices were at their highest. I've never believed that buying a stock back really helps shareholders. As a shareholder, I'd rather have a dividend--money in my pocket at a tax advantaged rate. Personally, I think that the stock buybacks were to manage earnings forward giving a slowing rate of growth. I would not be surprised to see some litigation around these stock buybacks.
Futures are up as I write. As Gary K states, a signature bear market is strong open and pitiful close! There's nothing wrong with being the hunting dog--be steadfast, keep your eyes open and nose to the ground. You'll find out if it is a bull or bear soon enough with your patience and caution--it cannot outrun you, but it can run over you.
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7 comments:
Terrific post! Thanks.
"a signature bear market is strong open and pitiful close"
DJIA up about 190. So this is not a signature bear market then?
Anon--I'm not sure that the "signature" appears on each day. I think that is why there are things called "relief" rallies and "dead cat bounces". ONe thing we can all be sure of, the bear market will only be confirmed in hindsight.
Goldman's downgrade and defensive posture was telling today.
I love the nitpickers.
Anyway, L, horrible internals on this 215 pt pop. Did you see all the new lows? Did you see that the S&P bullish percents DECLINED? Twice the market sold off and twice there was a frenetic rally em back up. It was weird and forced.
It's in the books though so we respect it.
Half of the market is quite, quite sick. The other half still believes in the lies.
If GOLDMAN had come out and said the R word there would have been a stampede. They said everything but.
Let's see if they can get this rally past 13250-300.
Good luck.
Hi all,
I'm a T&A follower, and I agree with Anon 6:32. Theres nothing in this rally that says the market is going up over the next few weeks. Right now the Dow is up another 250 points, but I am holding some inverse ETF's and expect this market to crash into next year. If it is up big tomorrow, I'm going to buy more. I only watch T&A figures and it hasn't failed me yet.
Good luck to all!
Suyt
Home sales plunged and the Fed Beige Book couldn't have been more bleak.
This is a dead cat bounce for sure
I am firmly in the Recession camp but am openly wondering what it will take to kill the "animal spirits" on Wall Street. I know that they see it and am amazed that they continue to play the game. Now that the pension funds have exited it is just the hedgies, the prop desks and a few semi-pros shooting craps.
Look at the chart of the homebuilders to see how the financials will play out. Homebuilders are about done except for the additional 20% that comes with the wave of BKs. Financials will likely have a nice looking bounce then resume there downtrend.
If anyone is asking these type of oversize pops are MUCH more typical of a Bear Market than a healthy bull. I say they rally it until the next ISM number comes out.
I have not changed my investment stance one iota since 2007 began. It helps that PG has been the go-to in this decline. :)
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