This is interesting. It is from the crew at Bespoke.So I guess China has quite a few more points to add on before imploding and at the rate it is going it should be there next week (humor attempt).
I was in transit when the GDP number printed. When I saw such a big number versus what was expected it seemed that something was not right. Barry called shenanigans on the whole thing, this is a must read. When a number is very far from what's expected something will be strange. Maybe you can't figure out what but others will.
By now you know the Fed cut by 25 beeps, tried to talk tough in the statement and after hiccuping, the market whizzed higher. This is an interesting market these days. There are countless signs of weakness.
The Fed obviously doesn't cut rates because things are ducky.
Crude oil at $95 probably isn't helping too many people (save for the oil companies and the people who own the shares) but even in the oil patch there is strangeness with gasoline not keeping up with crude, this is something you should have read about by now.
The dollar is at some shocking levels against GBP (close to 2.08), AUD (above 0.93), EUR (flirting with 1.45) and the loonie which is below 0.95.
Earnings growth is slowing way down, again not a sign of strength.
Despite these issues plus a few others the market does has not cared about any of them, so far. Maybe that will change in the future or is changing today?
This reiterates that the market can go big in either direction regardless of what the fundies would seem to dictate. I am plenty long (not 100% as I have mentioned many times) and plenty confounded. There are plenty of people out there to make the bull case and I am not sure if they are actually right or right for the wrong reason but for now they appear right. I don't really care, I just need to focus on staying somewhat close, which is what you need to do also. I am not sure how many times I have said this but it is true; there is no harm in lagging a monster rally but missing one is bad news.
I picked up the book Black Swan by Nassim Nicholas Taleb for the plane ride to Arizona. I only made it half way through. It is not an easy read so far. The half I have read seems to be more about base building for what might be coming in the back half. He is incredibly well read and intelligent but based on what I think I know about his beliefs I am not converted yet but it has been very insightful nonetheless.
Last week when social networking site FaceBook was making a lot of news I decided to join to see what it was all about. Well I joined but am not really sure what it is about. Generally I am not too into this sort of thing, email is good and I have no aspirations for being upwardly mobile so it is not crystal clear how I will use it but I know a lot of people do.The reason for the picture of the few "friends" I have is the bottom row middle guy. He just showed up in there. I find this very amusing. I fuzzed out the other names in case this sort of thing is not ok to do.
12 comments:
The major lessons from The Black Swan are (1) the more complex the situation, the harder it is to make any predictions and (2) the more complex the situation, the more likely that some completely unforeseen event will affect it.
SJ
I saw Barton Biggs on the tube last night and he said they think it's 1999 in China. So you've got a year left?
I'll give an internet $1 to someone who can figure out the next bubble. It's got to be out there somewhere. . .
how about a bubble in world series championships for the Red Sox?
An obscene avalanche of WS wins.
I am still not sure it is right to call China a bubble. Bubble status depends on the aftermath it causes.
Clearly a mania though, or if you prefer a frenzy.
Roger, can you clarify one expression? When you speak of the fundies, I'm not sure whether you mean the fundamentals or the hedge fund guys.
Thanks for lots of good insights
Linda
i mean fundamentals...I think that is fairly universal?
Hedgies is, I think, the universal slang for hedge funds?
In these troubled times i am turning to companys with the widest of moats. Would anyone like to try and make a list one company with the widest of moats in each of the ten major sectors of the market for both foreign and domestic companys.
WRT Black Swan I haven't read it but I did make a concerted effort to understand complexity theory a decade or so ago and came to the conclusion that it was really a subtask of the more general and more ambitious program of creating a robust theory of models.
Such a theory has not been developed AFAIK and frankly it could be a chimera because there are two fundamental obstacles: (1) our language itself, -- and by language I mean symbol systems including math, computer code, etc. -- may not be able to provide a sufficiently precise description of observation and (2) the deeply intractable or emergent behavior of the systems we may most want to predict.
IOW we have learned so much about prediction and how to do it but a far more powerful modeling approach needs to evolve before we can really handle systems that are: a) 'chaotic,' essentially deterministic but still unpredictable in detail or at certain ranges of values; b) 'lawless,' seeming paradoxes and/or computations that appear unsolvable in any known symbol system; c) 'irreducible,' involving multidimensional connections which (apparently) can not be broken down into component parts for analysis w/o ceasing to function normally or even entirely; and d) 'emergent,' self-organizing systems whose final state can not be precisely determined even under ideal circumstances.
And all that basically means is there can be no substitute for anticipating and preparing for the unexpected: In investing that generally means targeted diversification and hedges (sure am glad I had 'em today) and alternative sources of alpha (glad I've got some of that too) …and some luck (hanging in there).
There is some really serious head-banging going on out there.
Anon 10:29.
List your idea of the ten major sectors please.
Perhaps:
Banking
Energy
Electronics
Retail
Utilities
Automotive
Telecomunications
Precious metals
Healthcare
Software
Is fear back?
http://tinyurl.com/3bu46j
CROX was down a whopping 36% today and closed at $47.74. They earned 66 cents a share but analysts polled by Thomson Financial had expected it to earn $1.97 a share. Still their earnings more than doubled in the last year.
In the first quarter, the company will be selling its merchandise at Foot Locker.
Was this sell-off an overreaction, and it this now a good value buy? It's up to $48.10 in after hours trading. I also wonder if their shoes are a dying fad?
Wanted to say, I enjoy this blog. Seems very real, very casual, like a regular person with money on the line.
The times we are in do seem odd, and while China is in a frenzy, I think the ruling powers there are quite aware, unlike in other bubble situations where nobody seems to focus until the damage is done. Then too I think the changes in China justify some of the inflated prices and long term the investments will prove valid. The sheer numbers of people involved.
As for Facebook, I'm on there, with one friend, since none of my real friends use it. I have my doubts that they are worth a $15 billion market value however. Also check out Ning, which lets you create your own social network, as opposed to just making a page on a facebook or myspace.
In any case, reading your market thoughts are always interesting. Arizona here, by the way. (Phoenix).
Rog,
you should change the title of your blog to
RAMBLING RODGER
what the hell connects any of this drivel?
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