It is time to get Very BULLISH !

[theasiareport]

Just to add on a P/B basis, the only time where Asia ex Japan has been cheaper has been 1998. Period now is comparable to 2003 (SARS), 2008 (GFC).

[watsa_is_a_randian_hero]

On a P/B basis, the MSCI EM never had a 12 month negative return following point in time when its P/B was this cheap or cheaper over the period of 1995-2015.

[ni-co]

 

 

adding my 2 cents here.......

 

For all the talk about CAPE, we must be mindful of the 10yr interest rate which Schiller includes in his data. It has rarely if ever been this low. Buffett said the future is great for stocks if interest rates stay this low.  And I firmly believe this is the case.

 

Another fact is that the world is awash with money but inflation for consumables isn't there. But there will be inflation of investments assets. So there is money to be made despite low GDP growth.

 

Just be aware that these are two conflicting statements. Because "inflation swindles the equity investor" and rates won't stay low when inflation pops up.

[Guest MarkS]

I don't know if this signals a bottom .  But it's kind of funny.

http://www.bloomberg.com/news/articles/2016-02-09/goldman-sachs-abandons-five-of-six-top-trade-calls-for-2016

Thanks

Mark

[boilermaker75]

I don't know if this signals a bottom .  But it's kind of funny.

http://www.bloomberg.com/news/articles/2016-02-09/goldman-sachs-abandons-five-of-six-top-trade-calls-for-2016

Thanks

Mark

 

Their clients are going to start referring to them as Goldman Sucks.

[John Hjorth]

I don't know if this signals a bottom .  But it's kind of funny.

http://www.bloomberg.com/news/articles/2016-02-09/goldman-sachs-abandons-five-of-six-top-trade-calls-for-2016

Thanks

Mark

 

Their clients are going to start referring to them as Goldman Sucks.

 

Boilermaker,

 

You just made my day!

[randomep]

 

 

adding my 2 cents here.......

 

For all the talk about CAPE, we must be mindful of the 10yr interest rate which Schiller includes in his data. It has rarely if ever been this low. Buffett said the future is great for stocks if interest rates stay this low.  And I firmly believe this is the case.

 

Another fact is that the world is awash with money but inflation for consumables isn't there. But there will be inflation of investments assets. So there is money to be made despite low GDP growth.

 

Just be aware that these are two conflicting statements. Because "inflation swindles the equity investor" and rates won't stay low when inflation pops up.

 

It sounds conflicting but it is the world we live in....

 

Actually what I am saying is that there is no inflation of consumables. So a company's balance sheet will get killed by inflation, but it isn't happening. COG isn't rising...... think of oil, or any other commodity..... even salaries aren't.... But real estate, stocks and bonds are rising in price. Which in my opinion justifies a higher PE.

 

So the net effect is that this is a massive re-distribution of wealth from the common person who doesn't save and invest, to the wealthy who do.

[frommi]

There is a bubble in fear!

[Cardboard]

That is absolutely correct Frommi. You have gold up 5%, BAC down 7%, treasuries skyrocketing, etc.

 

Not long ago, there were people on this board salivating at BAC around $15. Now that it is at $11, they take a pass... The value just evaporated or what?

 

I wonder if this is not the final play in this 35+ year decline in interest rates. Back then, people could not see an end to climbing interest rates: 15%, 20%, 30%, the sky was the limit. Similarly today, they can't see an end to declining interest rates: 2%, 1%, 0%, - 10% ?

 

Who would or is making the bet of higher interest rates? Everybody is on one side of the boat.

 

I really have no idea what would change that trend that has been with us for so long and for most all of our adult life but, you can tell that people are accepting the notion of a very large deviation from normal, an outlier and that this won't change.

 

Cardboard

 

 

[TwoCitiesCapital]

There is a bubble in fear!

 

Maybe in Europe and EM. We're nowhere close in the U.S. VIX is only at 30, which is elevated, but not insanely so considering we're firmly in a downtrend and have fallen 15% over two months. August was more like a panic taking us down that far in just a few days - but a 15% fall over two months seems more "thoughtful" and less emotional. Now, if this accelerates like August did and we get taken down another 15% in a few days from here, I might consider covering my shorts some.

 

 

You have gold up 5%, BAC down 7%, treasuries skyrocketing, etc.

 

Gold may be up 12% this year, but it's still down significantly from 2011 highs - just like all other commodities. Being up 12% after a 5-year bear market hardly points to a panic or a bubble in fear assets.

 

Bank of America is down because with the yield curve getting flatter by the day, their earnings power is seriously called into question plus the concern about energy contagion have a multi-billion dollar impact on their profits/reserves.

 

 

I wonder if this is not the final play in this 35+ year decline in interest rates. Back then, people could not see an end to climbing interest rates: 15%, 20%, 30%, the sky was the limit. Similarly today, they can't see an end to declining interest rates: 2%, 1%, 0%, - 10% ?

 

I don't think we're quite there. I imagine we'll probably take out the 10-year lows that we saw in 2012. Maybe even 10-year at 1% - though that's harder to picture. Who knows where the bottom is at in a world where central banks talk about negative rates like the concept makes any sense whatsoever. I think you're right that bonds will be a terrible investment in the long-term, but for the next 2-3 years they may still be the winners of the asset class race.

 

Who would or is making the bet of higher interest rates? Everybody is on one side of the boat.

if you exclude the Federal Reserve and it's $4+ trillion balance sheet, then sure. I'm not so certain it's wise to ignore them though. They may have to reach a point of capitulation too given they're such a large player in the markets.

 

 

 

[CorpRaider]

I'ma check into refinancing my mortgage.  hehe.

[ERICOPOLY]

Well, the "sell everything" guy was correct, but he'll probably miss the "buy everything" call.

[TheAiGuy]

I'ma check into refinancing my mortgage.  hehe.

 

I think the play here is the combo of credit card debt and short-dated, out of the money call options

 

(don't do this)

[plato1976]

I just locked a 30y rate @ 3.5%

I somehow feel I can refinance again later this year at 3.25% or lower

 

I'ma check into refinancing my mortgage.  hehe.

[LC]

Same, also just locked in 3.5% for 30

[petec]

Well, the "sell everything" guy was correct, but he'll probably miss the "buy everything" call.

 

Nah...he forgot to say "except Fairfax" ;)

[LowIQinvestor]

" This is just short covering, not legitimate long term buyers".....says market pundit.

 

I kid you not, my local radio station (large metro area) had a "stock market consultant" as a guest and he fielded questions from callers yesterday. The stock market consultant was talking all about technicals and saying he sees no reason to buy stocks unless the market rebounds (huh?). Then a caller asked how they can short auto loans..

 

I've become more bullish!

 

Happy friday

[CorpRaider]

You guys must have more equity and/or better credit than me, I'm getting a 3.8% quote from the two places I checked.

[LowIQinvestor]

Overwhelming amount of negativity:)

 

We are shorting SDS and VXX today. I believe these will yield excellent long term results.

 

Don't get too negative...it clouds your thinking

 

SDS is down 13% and VXX is down 15% since this post. Not covering...

[LowIQinvestor]

Decided to cover SDS and VXX.

 

Going long SXCL (Net Net)- Oil & Gas

[maverick]

Decided to cover SDS and VXX.

 

Going long SXCL (Net Net)- Oil & Gas

 

HighIQinvestor - so basically you are trading this choppy market, not really investing. Is that a correct interpretation?

 

I think that it's not the time to get very bullish, but it's time to be cautious. I will be using this rally to get out of some of my equity holdings.