A Rising Tide Lifts All Ships!

[rmitz]

Well, you know I invest like I do business, because that is what I understand and that is where I think I have an edge on other people. To rely too much on numbers simply is not my game. On which numbers, anyway? Peter Lynch managed his fund right at the beginning of the most fantastic secular bull market in history… Are his numbers really reliable for what might happen in a secular bear? Not any secular bear, but a secular bear at the end of a 70-year debt super-cycle? I am skeptical…

 

I just want to point out one thing here.  Not that I necessarily disagree, but not everyone may even accept that a secular bear market or a debt super-cycle is even something which exists.  That's probably where some differences in thinking are.

 

History is a useful force in finding today's patterns, but you can't get too close to using the patterns of yesterday to define "where you are".

[bmichaud]

^ I agree with writser. Don't see much optimism or reason for it. Even when the market goes up, the bears say, "It will be coming down soon....irrational exuberance".

 

I think in their zeal to be contrarians, many bears are really herding together. (Like hipsters  ;D).

 

These sentiment indicators would indicate otherwise....

Sentiment_Chart.pdf

Global_Risk_Appetite.bmp

Hulbert_NASDAQ_Sentiment.bmp

[bmichaud]

With more here....

Advisor_Bullishness.bmp

Fund_Managers_all-in.bmp

U.S._Equity_Composite_Sentiment_Indicator.bmp

Aussie_Dollar_COT_Positions.bmp

[giofranchi]

Well, you know I invest like I do business, because that is what I understand and that is where I think I have an edge on other people. To rely too much on numbers simply is not my game. On which numbers, anyway? Peter Lynch managed his fund right at the beginning of the most fantastic secular bull market in history… Are his numbers really reliable for what might happen in a secular bear? Not any secular bear, but a secular bear at the end of a 70-year debt super-cycle? I am skeptical…

 

I just want to point out one thing here.  Not that I necessarily disagree, but not everyone may even accept that a secular bear market or a debt super-cycle is even something which exists.  That's probably where some differences in thinking are.

 

History is a useful force in finding today's patterns, but you can't get too close to using the patterns of yesterday to define "where you are".

 

rmitz,

I do agree with you. But I cannot replicate txitxo strategy. To find stocks that are always statistically cheap on a worldwide basis is something I would be a real patsy at! Most of all because it is something I don’t like to spend my time doing! Have you ever become a master at something, without loving it? I doubt it. Instead, I like to find and study a few enterprises, which I can thoroughly believe in, and where I can put significant amounts of capital. And, if those enterprises aren’t exceptional bargains at the moment, I must somehow assess the risk of owning them. My judgment could be wrong, of course, but I guess a wrong assessment of risk would still be less detrimental to my overall performance, than trying to play a game at which I have neither skill nor interest at all.

 

giofranchi

 

“As time goes on I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence.” - John Maynard Keynes

[txitxo]

I just want to point out one thing here.  Not that I necessarily disagree, but not everyone may even accept that a secular bear market or a debt super-cycle is even something which exists.  That's probably where some differences in thinking are.

 

History is a useful force in finding today's patterns, but you can't get too close to using the patterns of yesterday to define "where you are".

 

  Actually that is not a trivial issue at all. Perhaps prices could stay "on a permanently high plateau", and that's what Bernanke is trying to achieve. But we have never observed them to do so. And there are good reasons (see the Minsky-Kindleberger rationale) to expect them to bounce up and down. So I think the odds are on prices going down sooner or later...

[bmichaud]

Margin debt nearing all-time highs....

 

http://pragcap.com/nyse-margin-debt-stalks-all-time-highs