MarketVVizard's Market Thoughts

Top 530. Nov 21, 2003 4:14 PM

» pbradford6 - Re: Re: Re: Re: Re: Re: Mortgages

In response to message posted by Jas_Jain

I am not pissed off at anything or anyone. I am simply pointing out how widespread this belief about inflation is and it is held by all the idiots and Crooks that I know or follow.

Jas, I agree that most everyone is very, very bearish on bonds and that has me a wee bit worried.

In October 1990, I attended an ADA dental meeting in Boston. Along with many scientific sessions, was a well attended session on investment strategies conducted by a guru whose name I can't recall. One of his chief concerns at the time was run away inflation and the benefits of Gold held in any form. He was very convincing and asked for a show of hands who thought gold and inflation were going through the roof. All hands raised in unison. Then he asked for a show of hands who thought gold was about to fall. Maybe 2 or 3 hands were raised out of more than 1000 in attendance.

From that experience I learned a powerful lesson of contrary investment. Gold and inflation immediately began to recede.

I wonder if in deed there might be the same principle in play today with the near universal consensus about the forth coming bear market in bonds? It does give me pause.

Deflation may not be completely taken off the table. I hold T.I.P.s partly as a play against deflation and inflation as part of my fixed income portfolio. But I am long the market.

-- posted by pbradford6

Top 531. Nov 21, 2003 5:33 PM

» Jas_Jain - Re: Re: Re: Re: Re: Re: Re: Mortgages

In response to message posted by pbradford6:

--
"Deflation may not be completely taken off the table. I hold T.I.P.s partly as a play against deflation and inflation as part of my fixed income portfolio."

Very smart move on your part. I started recommending TIPS before all but a few knew of them.

"But I am long the market."

Most, but not all, the idiots and Crooks I know are long the "market" and recommending being long the market, respectively. I am the worst MT in the world, but market is likely to have the worst decline in 2004 in more than 70 years.

My "faith" in Idiots and Crooks is well founded and unshakable, but only in long-term. In short-term, Idiots and Crooks may hold sway, as they have demonstrated time-and-again in recent years. Their time is about to come to an abrupt end; I don't know the beginning date.

Jas

-- posted by Jas_Jain

Top 532. Nov 21, 2003 6:12 PM

» Kirk - Understatement of the Year Award

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In response to message posted by Jas_Jain:

I met Jas in 1998 or early 1999 and he said the same thing...

I am the worst MT in the world, but market is likely to have the worst decline in 2004 in more than 70 years.

Except the crash was to start then rather than next year. Of course, we did get a good one in 2000/2002 that brought the market back to the 1998 levels... smile

With any amount of luck, he will keep extending his time frame.

-- posted by Kirk

Top 533. Nov 21, 2003 7:24 PM

» Jas_Jain - LIE of the Year Award -- Re: Understatement of the Year Award

In response to message posted by Kirk:

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"I met Jas in 1998 or early 1999 and he said the same thing..."

IT IS A LIE. Since there is no way to verify, so I will let people make their own minds. Here is what has been my general thinking.

My model has been -- from the peak in NDX, the decline will be more severe and take longer than the 1929-1932 decline in DOW. I never expected the worst decline to occur in 2000 or 2001 or 2002. Late 2003 was the earliest possible period, as per my model, but the most likely period is 2004. There is a small probability that it might happen in early 2005. The exact pattern is not knowable; only a general pattern is predictable.

"Except the crash was to start then rather than next year. Of course, we did get a good one in 2000/2002 that brought the market back to the 1998 levels..."

Beginning of a crash is one thing, but the worst decline is likely to occur at a later date. A date that is in the future.

THE WORST DECLINE WILL COINCIDE WITH RECESSION. I think that 2004H2 will usher-in recession after a weak growth in 2004H1.

"With any amount of luck, he will keep extending his time frame."

Hey, I have always owned up to my predictions and their outcomes. BUT WHY ARE YOU LYING ABOUT WHAT I SAID IN 1999? Did I say that the worst decline will take place in 2000 or 2001? I said that techs like CSCO were grossly over-valued and would correct severely. The correction is NOT OVER yet.

Just straightening the record,

Jas

-- posted by Jas_Jain

Top 534. Nov 21, 2003 7:35 PM

» Kirk - Re: LIE of the Year Award -- Re: Understatement of the Year Awar

In response to message posted by Jas_Jain:

Well, sorry if my facts are wrong. I remember you saying it was all over valued and going to crash. I don't recall you saying the nasdaq would go up 2x or so first.

How many times did Cisco double between when we met and when it peaked?

I think two doubles would be about right
and it is higher now than it was back then.

You might have been right that it is over valued but one would have lost all money invested if they went short CISCO on your advice.

If we met in later 1999, then Cisco is in fact lower.... but still the timing was wrong.

BTW, I have a 1996 email from you predicting a 96% nasdaq decline.

-- posted by Kirk

Top 535. Nov 21, 2003 7:51 PM

» Kirk - Found it

.
OK, I was a bit off in time... but

remember you gave me PERMISSION to post any of your market discussion emails.

At 08:14 AM 7/26/99 -0700, you wrote:

>>INteresting predictions.
>>Are you short now?
>>Are you the JAS I had dinner with a few weeks ago with xxxxx

Yes!

I was more bearish then but still very bearish now, particularly 10 largest techs that constitute the Jazzman Index, which peaked on 7/19/99 morning and is down 10% already in a week!!

I am SHORT big-time the semis (since 7/6/99) and Internuts (since Mar'99). But I have been bearish since Apr'96 and, obviously, lost money due to being early. However, I hope to recoup all that in the coming three years and more.

Clearly Cisco doubled after that note.

but you were right that a crash was comming... just your timing was off which is what I said was an understatement.

-- posted by Kirk

Top 536. Nov 21, 2003 9:01 PM

» MarketVVizard - Re: Found it

In response to message posted by Kirk:

He was only about 4 years early on his bear call though! I can't believe you actually met the Jas face to face!

Eh, OK, I'll quit pickin' on the Jas. We actually agree on a few things. I do believe we will see new lows, and I also believe the secular bear will last MUCH longer than most think (on the order of 10-20 years). That is not to say I won't be going long for 10-20 years though...
I'm also not that concerned about the timing. I know Bush will be pumping next year up to election day, but he is "fighting the tape" in my opinion. Could he "lose" with market crash next year? Its possible. Either way, by end of 2005 I think we will be substantially lower than where we are today (at least 20% on the major indexes).

Japan ALLOWED deflation. I think Bernanke made this pretty clear in his now infamous speech:
Deflation: Making Sure "It" Doesn't Happen Here
[As a side note: WOW no one mentioned it is the ONE YEAR ANNIVERSARY to the day, of this classic]

I STRONGLY suggest you read Bernanke's speech if you haven't already... (or read it again)

And again, one EXTREMELY IMPORTANT difference between Japan and the US is our trade deficit.

Furthermore, deflation hasn't really even been that serious in Japan, nor has it really lasted all that long.

-- posted by MarketVVizard

Top 537. Nov 21, 2003 9:27 PM

» MarketVVizard - For those that need me to spell it out...

Bernanke: "Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

p.s. I won the auction, now I can go to bed...
smile
[Mental note: Don't schedule auctions that end at midnight on a Friday.]

-- posted by MarketVVizard

Top 538. Nov 22, 2003 7:41 AM

» pbradford6 - ALAN ABELSON, Perennial Bear

The always bearish Alan Abelson of Barrons had the following to say:

NOT THE LEAST REASON WE REMAIN skeptical of the bullish case for the market is that the corporate top dogs themselves are so implacably skeptical about the prospects for the stocks of the very companies they run. On that score, we asked our crack researcher, Teresa Vozzo, to bring us up to date on what the captains of commerce and industry have been doing in the stock market and she, in turn, queried the knowledgeable Lon Gerber, who keeps track of such things for Thomson Financial.

In a nutshell, Lon reports, the pride of corporate America are still dumping their own stocks as fast and furiously as they can. In October they bought all of $52 million worth, the smallest amount of buying since July '95. By contrast, they sold $3.2 billion worth. Lon says it's the most lopsided sell-to-buy ratio he has seen in at least a decade.

Techs were the targets of concentrated insider selling, especially the semiconductor stocks. Notably among them were Texas Instruments, Lam Research and Intel.
Moreover, this same lugubrious pattern was evident in the opening weeks of November. During the first half of the month, insider selling aggregated $2.7 billion, so Lon reckons it's a cinch that for this month as a whole sales will top $5 billion; not since May 2001 has there been any comparable liquidation. Insider buying in November, meanwhile, totaled $47 million.

We're the first to agree that what management knows is always open to question; but, chances are, it knows a bit more about its company and its industry than some heavy-breathing Wall Street bull. It's one thing for insiders to sell. But it's another thing for them to sell with such gusto and consistency, while buying so sparingly.

-- posted by pbradford6