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Top 82. Nov 14, 2001 10:35 AM

» soonertimer - Re: Re: Re: Earnings estimates

In response to message posted by lcha:

You are correct - Yardeni never suggested that investors cash out in '99. I remember an article in Barrons in the later half of '99, where he discussed how the market was "overvalued" based on the "Fed model" and furthermore he examined the forward earnings assumptions that investors had priced into share prices. NO mention was made of Y2K as a potential cause for a bear market.

His perspective was primarily as an economist, NOT a market strategist. Thus, much of his commentary/analysis had the tone of "on the one hand this, but on the other hand that".

-- posted by soonertimer

Top 83. Nov 14, 2001 11:36 AM

» lcha - Re: Re: Re: Re: Earnings estimates

In response to message posted by Kirk:

Yardeni's asset allocation is based largely on the Fed model that has gotten so much attention lately. You can find a historical graph of this, as well as Yardeni's asset allocation overlay going back multi years in the stock lab area on his web site. His allocation model NEVER gets below 60% stocks and it hit that level in 1999 & 2000. He is currently 80% invested in equities.

I like Yardeni's web site for its wealth of economic and market information but in the end Yardeni is being paid by an investment firm so I have little trust in his market commentary.

-- posted by lcha

Top 84. Nov 14, 2001 4:18 PM

» Rande - Re: Re: Re: Re: Re: Earnings estimates

In response to message posted by lcha:

Yardeni was recommending 25% cash and 40% bonds, at a minimum, in early 1999 based on his Y2K fears. Actually, as far back as 1998:

The National Post, November 4, 1998

For individual investors, Mr. Yardeni suggests a far more defensive 25% cash, 40% bonds, 15% stocks and 20% in speculative investments, including hedges. That was unchanged in a November 2 update.

-- posted by Rande

Top 85. Nov 14, 2001 5:03 PM

» Rande - Re: Re: Re: Re: Re: Re: Earnings estimates

In response to message posted by Rande:

BTW, 1999 was a lousy year for bonds. Cash was trash. And hedging the market at that time was an unmitigated disaster. However, and to his credit, Yardeni later admitted he was as wrong as wrong could be when it came to his overblown Y2K scare mongering. Honesty, if nothing else, is a rare virtue in the investment guru business.

-- posted by Rande

http://www.suite101.com/discussion.cfm/i...

Top 86. Nov 14, 2001 5:24 PM

» Kirk - Dr Ed the 1998 Bear

In response to message posted by Rande:

Did you all know we had an Ed Yardeni thread here?
http://www.suite101.com/discussion.cfm/i...

People say I pick on Brinker but that thread on Yardeni dates back to August 1998 when Brinker still liked us and linked to our site.

I LOVE PeteM's complain about these pundits not having records of their past... Heck, they can stink up the place and then people like icha (not to pick on you) can stumble in years later and not have a clue how retchid their advice was in past years.

Well, Dr Ed was a bear according to PeteM:

That first sentence pretty much says it all:

August 22, 1998 7:35 AM

I(f) Dr. Ed is right we are in a bear market. If he is not we shall find out within the next months. There are many market timing charts there, but it is not clear whether they are indicating to sell at the bottom of these corrections and bear markets or whether they are truly indicating a sell before the major drop in prices.

Why don't these pundits perform a simple comparison between holding stocks and following their timing models, so we would know if their timing models really work?

I bet I earned a few dozen sponsor clicks and some should subscribe to my newsletter in thanks just for learning about this guy and his past record!

-- posted by Kirk

Top 87. Nov 14, 2001 5:26 PM

» Kirk - Re: Dr Ed the 1998 Bear

In response to message posted by lcha:

Icha, not to pick on you, but this example is to show the value of this site.

Learn to use our search engine and do a search for posts by CONTRIBUTOR "Jack Swanson" with the word "Yardeni" in the body. Search for 1998. Perhaps even look in 1999 but do 1998 for sure. Jack became a fan of us and you will see why if you find some of his posts about Dr. Ed and all his bearish nonsense.

I think Jack ended up calling him "Ed Yardummy" and even gave him the first of his famous award (AHole of the year) after that mess.

-- posted by Kirk

Top 88. Nov 14, 2001 7:21 PM

» lcha - Re: Re: Dr Ed the 1998 Bear

In response to message posted by Kirk:

I was just looking at his graphed asset allocation on his web site and his explanation of his interpretation of the Fed stock valuation model to get the 60% stock minimum. Obviously, that is not the allocation he was publicly espousing. While he may have been bearish a little early in 1998, it was Yardeni who used the phrase "10,000 by 2000" in 1990 in regards to the DOW. Back in 1990 this was thought somewhat absurd and I think he hit the mark pretty close.

I don't fault anyone for not predicting the BIGGEST FINANCIAL BUBBLE IN HISTORY as frankly, they don't come around much.

As for scare mongering on Y2K, nobody did it better than the tech industry who used it as a great excuse to bleed the world of BILLIONS of $$$ of needless spending. Spending which helped create the stock market bubble, the after effects of which we are dealing with now.

Bottom line is I don't really give a flip about the opinion of anyone who is actively making money off the investing public. The obvious and not-so obvious conflict of interest is enormous and Yardeni is in that camp. That's just me.

-- posted by lcha

Top 89. Nov 15, 2001 12:41 AM

» PaulJoslin - Re: Re: Re: Dr Ed the 1998 Bear

In response to message posted by lcha:Whatever, I think a guy can do very well in here with 60% exposure, as long as he trims it back when it gets much over that, and brings it back up when it drops.

-- posted by PaulJoslin

Top 90. Nov 15, 2001 1:09 AM

» PaulJoslin - 60/40 Stocks to bonds

I really like that mix in here better than 70/30 or 50/50 or 100 percent one way or the other. I guess I'm basing it on the speed of the market movment vs. rates. I honestly think if you take your profits and replenish your losses on both sides, you will out perform any DCA or straight buy and hold strategy.

-- posted by PaulJoslin