Many of us, yours truly included, saw clearly for a while... and some how lost our way in the markets of late. Yea, my precious metals have done well, but I sold out my paper metal 12% ago (ouch) and missed the equity rally.
There's a lesson here. In the short run FUNDAMENTALS DO NOT MATTER. Technicals do not matter, either. So many of the doom and gloom crowd are disappointed that Bernake et al, have so far, won this battle (the WAR is a different thing)... that's the thing about this business. You have to be able to acknowledge when you are wrong. The market is ALWAYS right.
In Gold/Dow terms the market is NOT up. That, too, does not make us Deflationists look too smart. Oh, well. It is a blown opportunity, and hopefully there will be more blown opportunities with some not blown opportunities in the future.
Not that the Fed was perfect in their moves... they flooded the system with liquidity hoping that the money would show up in housing. That didn't work out so good... the fund's flowed to U.S. equities, Gold, and Oil. Some of that was welcomed, some not. The end game should prove rather interesting... but those defaltionist bloggers? They got this one dead wrong.
The good news is, nobody stays cold (or hot) forever. The markets are open for business every single day, and each day is a new day.... BTW, this is not a "throw in the towel and go long moment"... just venting that I wish I went long equities... that does not mean I would do so now.
8 comments:
Every boom is followed by a bust. The deflationists could be right in again in a few short months. I picked the end of this to be April. If things hold up, I'll be wrong in two weeks. Still scared to death.
Regards,
Coal Guy
The deflation model is still in place. $20 trillion in credit being destroyed worldwide. Small businesses are on life support. Mish is still unapologetic. :) These things take years to work their way thru, and we instead have a world that works via minutes, not years. Patience, grasshopper.
You, we and I missed nothing. This stock market is a house of cards, with thin volume (because the banks are just trading stocks with each other -- the average guy is sitting this market out), super-low interest rates ("don't fight the Fed," but this is how bubbles occur everytime -- cheap money), and an economy its own mother couldn't love, based on the facts on the ground.
As gamblers, we'd spank ourselves for missing this 60-week positive run. But I'm not a gambler, and this thing is going to come crashing down. If it doesn't destroy itself, like every bubble in 500 years of history, peak energy will be the clincher.
Never in human history have we borrowed so much money .. worldwide!!! This has got to stop somewhere.
Bur:
In case you missed it (it was in all the papers) the equity market has CRUSHED the deflationists and the shorts - just decimated them.
They may prove right in a few months, but they, and I, missed the greatest equity rally in the history of the game. Believe me, many of these guy's career will NOT recover. My business is a short memory, and you are only as good as your last trade.
"the greatest equity rally in the history of the game." Can you really look in the mirror, and with a straight face, tell yourself that the equity rally was based on anything realistic? Do you really believe the "recovery is happening" because we've paid off our debts, our business community is thriving, and there is nothing but ponies and rainbows as far as the eye can see? That's pure crappola.
Lots of money was provided to the world via the Fed at zero percent interest rates, and given the total lack of options, it ended up flowing into the equity market. It is a fraud, and will reverse the minute the 10-year yield goes above 4% and then 5%.
There is still GROSS overcapacity in everything, one of the side effects of deflation. For the Milton Friedman purists, huge amounts of cash and credit are still leaving the system -- the very definition of deflation.
The truly maddening thing is I went all in on March 9th then got cold feet by Monday morning. It was nuts to bet it all on Bernanke & co. being able to pull it out a hat, even though they did just that. There was no good reason for the rally.
Bur:
It does not matter if it was based on "anything". At least to me it does not. The deflationista's missed one hell of a great opportunity.
THat was yesterday. What's the best play now?
As the greatest Republican leader of all time said ... "stay the course." :)
Bur,
I used to stay the course. It got me nothing in 10 years. I hadn't been actively watching things, just doing what the retirement guys and "professionals" said. Just ride through and over the long term...
Well, maybe that was true when there was actual economic growth. But when there is no growth or the economy is shrinking, you have to actively pick winners, or sink with the tide.
That Republican leader and Paul Volcker did squeeze the inflation out of the economy, but they lost their nerve in 1987 when the stock market fell 25% in a day. Even then the bubble was politically unstoppable.
Regards,
Coal Guy
Post a Comment