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Mar 10, 2008 1:13 am

I could spend untold hours debating all the doom and gloom that's been posted here lately by a bunch of folks who were nowhere to be seen even six months ago.  I'll start by saying that Dob, you are the exception to the rule, and I have plenty of respect for you and your POV.  The rest of you, listen up...

 
Just because I happen to see some light at the end of the tunnel does not make me a stupid salesman and I'm getting damned tired of the insinuations to that effect.  You all are entitled to your opinions (and that's all they are), but I'm getting sick and fed up with a band of chicken littles who all think they're smarter than Ben Bernanke trying to ram their message of armageddon down our throats.  I've seen a hell of a lot since I entered the investment business in 1989 and I've taken a hard look at what happened prior to my entry into the business, so I think I know a thing or two about how markets work.  I don't claim to have all the answers and frankly, you all shouldn't either.  From the sound of the posts here, you'd think you all predicted the 2000-2002 slide with stunning accuracy and completely prevented client losses during that timeframe.  If you're all so damned smart, where were these predictions as little as six months ago?  Show me your posts (not Doberman's).  You're all so busy patting each other on the back for your brilliant economic analysis, you can't even tell how breathless all your dire predictions sound.  You want predictions?  Here are some of mine:
 
1.  Within the next 6-12 months, the world will not end and the bulk of you will crawl back under your rock never to be heard from on this forum again.
2.  The dollar will strengthen (either because we've finished rate cuts or because other countries have started), oil will stabilize (and may even decline modestly...shock!!!) and the market WILL go up again.
3.  Those same clients who believe you are geniuses today will turn on you when their friends are again making money in the market while they're still stuck in gold funds and T-bills.
 
Hell, it's EASY to be a bear right now and seemingly everybody is jumping on that bandwagon.  What is much harder is buying value and bonds when internet stocks are going crazy (that's how I survived 2000-2002).  I did very little tech investing at that time because I was a fundamentalist focused on P/E ratios and just couldn't get comfortable with companies without earnings.  That same mindset caused me to miss the entire run in GOOG.  Today, I will happily recommend tech sector funds as I believe tech is as esential as any industry out there and the prices are in my happy zone.
 
I could post six more paragraphs and not get all that I'd like to say out of my system.  We're in a depression, my ass.  A statement like that tells me that you have no clue what a real depression looks like (try 25% unemployment).  It sure isn't this slowing economy we're dealing with - not by a long-shot.  It's always different this time...and yet, we always find a way to deal with it, whether it's 25% unemployment 18% interest rates or a large-scale terrorist event, to name a few.
 
You'd get a whole lot more respect from me if you tempered your views with a dose of reality - you don't know what's going to happen either.  A bear-bias is fine and you're welcome to it, but this wholesale the-world-as-we-know-it-is-ending scenario is pretty unlikely in the minds of all but the most extreme economic views and IMHO, you'd be wise to consider a less extreme view when investing client assets.  Just because I'm modestly bullish doesn't mean I'm 100% in stocks for my clients.
 
There, for what's it worth, is my rant and humble opinion.  I'm not here to win popularity polls or convince you that my POV is the right one.  At the same time, I do feel a need to temper the tone here when, in my view, it gets too far off the beam in either direction.  Having done my part in that effort, I'm done now.  My time is better spent trying to help my clients than trying to convince a bunch of bears in hystrionics to take a look at the other side of the coin, so that will be my focus starting later this morning.
 
Have at it.
Mar 10, 2008 8:42 am

Indy, I for one have had enough of your Mary Poppins view of the world. What's your theme song "The Sun Will Come Up Tommorow?" It's guys like you that have cost investors thousands of dollars with their head in the sand (please note I could have gone with a body part here) naive view of world markets.  Do you really think that just because your pie in the sky positive attitude has made investors billions of dollars in the past that it's still valid? Bud, you need a serious wake up call because this time the sky really is falling. And if you don't believe me, did you notice that when your alarm went off today, the same time it goes off every week day, that it was very dark outside? darker than it was last week? And that the sun didn't rise until much later this morning. That my friend is a sign. That is the sky falling.  And you'd better take heed! Oh yeah Indy, the sun will come up tomorrow, you hope!

Mar 10, 2008 4:30 pm

...BG...I'm thinking back to this morning, and...I think the sun DID come up later...about an HOUR later if I recall correctly...perhaps I'd better re-think my strategies...


Also, I considered your theme song suggestion, but besides the fact that it's a bit steep for my vocal range, it's kind of an annoying tune.  Sadly, now I can't get it out of my head...


Thanks for playing...I enjoy reading your perspective...
Mar 10, 2008 7:36 pm

Keep it going Indy, nice to hear a positive voice once it a while.  There are plenty of us on here who still share your point of view.  We just may not be as vocal as the others. 


Long live capitalism and long live America. 
Mar 10, 2008 8:16 pm

As I tell clients, there are always several reasons NOT to invest, and those that take that advice are right about 1 out of every 4 years.  However, those same negative Nancy's are missing out on the other 3 out of every 4 years the market is up.  I'd rather be batting .750 than .250.  With proper allocation, people will come out fine.  My average client is down 6%, but the market is down about double that this year.  If I get lucky and can catch it near a bottom, I will be adding to some serious equity positions.  We'll see Bondguy who's right in 3-5 years.

Mar 10, 2008 8:51 pm

I agree with Indyone and rankstocks, and history is on our side. 

Mar 10, 2008 9:45 pm

I agree with all of you...no one knows...right?????

 
I do know we have an oil issue at hand..the price may go down due to recession and deflation..but I feel  oil will be a huge issue from here on out...
Mar 10, 2008 10:09 pm

FWIW, Bond Guy and I are fine...there was a pretty heavy dose of sarcasm in his post...you just have to read it carefully to pick up on that.  My first clue was the daylight savings reference...

Mar 11, 2008 9:46 am

It was pitch freakin dark again today when my alarm went off. It's the sky, it's falling. it's falling I tell ya! They're coming to take me away hey hey. They're coming to take me away ho ho. To the funny farm where life is merry all day ho ho hey hey...

 
Ok, I really thought my sarcasm was pretty obvious. Apologies to anyone who got sucked in.
Mar 11, 2008 4:30 pm

It seems like the Fed is determined to buoy asset prices & the Fed has an unlimited supply of money to do it with. Don't bet against the Fed!

Mar 20, 2008 5:59 pm

Ten days later, where are all the bear posts...?  Heck, it's early...we're far from out of the woods yet and only Doberman stuck around to act as counterweight.

 
I'll say it again, none of us knows where the market will be tomorrow, but anyone who recently went long oil, gold or other commodities and short US equities has been grabbing their shorts and paying the price.  Other than managed futures, I've stayed the heck out of commodities...much too volatile for my blood.
 
Short-term moves are very difficult to predict and playing them means playing with fire...
Mar 20, 2008 7:39 pm
Indyone:

Ten days later, where are all the bear posts...?  Heck, it's early...we're far from out of the woods yet and only Doberman stuck around to act as counterweight.

 
 
Hey, I paid for the ticket, so I'm going to stay to see how this movie ends. 
 
Seriously though, I'm still not wavering on my position. It's easy to get fooled by looking at market action alone and deciding that everything is ok. Again, market action is simply investors' perceptions of the economy and I prefer not to be led astray. It's the fundamental aspects of what the Fed is doing, that will come back to bite us, in my opinion. It could bite us next week or next year, but it will bite.
 
The laws of fundamental economics haven't changed, just merely postponed. And that's why I haven't dumped all my clients' assets into gold, commodities, and foreign stocks. I look for sign posts along the way and add a little here, a little there.
 
Having said all that, I still consider that fact-based arguments posted here that things aren't as bad as they appear and that (gulp!), I could be wrong. But the fundamental aspects of our economy are just too disconcerting for me to be optimistic.
 
Just saying'...
 
Mar 21, 2008 12:08 am

I hear ya, Dobe.  My point is simply that (1) None of us really knows what's going to happen, despite all the chest-thumping we witnessed in January and February (I wonder how 7's new clients feel after the past few sessions) and (2) it's interesting to me how the chorus of gloom and doom has all but disappeared with just a couple of good days in the market (your words of caution excepted).  As I said earlier, it's easy to be a bear when all the news is bad.  If the foul weather bears had real conviction, they'd still be here pounding the table rather than being preoccupied covering a bunch of bad trades.  If you take a more moderate bear position, hedging your bets, your workload is much lighter when the market turns against you.  No question if things head significantly south again, these foul-weather bears will most assuredly be back saying "I told you so" while conveniently ignoring the permanent stains in their shorts caused by market moves like we saw Tuesday and today.

Mar 21, 2008 10:40 am
Indyone:

I hear ya, Dobe.  My point is simply that (1) None of us really knows what's going to happen, despite all the chest-thumping we witnessed in January and February (I wonder how 7's new clients feel after the past few sessions) and (2) it's interesting to me how the chorus of gloom and doom has all but disappeared with just a couple of good days in the market (your words of caution excepted).  As I said earlier, it's easy to be a bear when all the news is bad.  If the foul weather bears had real conviction, they'd still be here pounding the table rather than being preoccupied covering a bunch of bad trades.  If you take a more moderate bear position, hedging your bets, your workload is much lighter when the market turns against you.  No question if things head significantly south again, these foul-weather bears will most assuredly be back saying "I told you so" while conveniently ignoring the permanent stains in their shorts caused by market moves like we saw Tuesday and today.

 
Agreed, Indyone.
 
On a lighter note, ya' still sportin' a tan from your Florida trip?
Mar 21, 2008 5:53 pm

Dobe, Even though I don't share completely your view of the world, i certainly don't dismiss it. And I look forward to reading your posts. They are as Indy puts so well, an effective counterweight to the blue sky POV so often expressed. Certainly very worthy of consideration.


That said, I believe the seperation point is that you are an advisor with a well researched POV to which you are convicted while others are just trying to trade the market. That's a huge difference.
Mar 21, 2008 6:30 pm

Amen, BG. I've shared some of the crazier things said and referenced here with my morning call strategists and while they don't dismiss some bearish sentiment, they've steadfastly dismissed the GEAB and the view that we're in a depression as patently ridiculous. I hope you're wrong, Dobe, but your arguments are harder to dismiss than those of the GEAB.



...and sadly, I'm heading back to the drenched midwest...just north of Macon in a pile of traffic. Heeding your warning about the GSP, I wrote down the number of a traffic ticket attorney from a billboard...apparently, it's big business in these parts...

Mar 21, 2008 6:35 pm
BondGuy:

Dobe, Even though I don't share completely your view of the world, i certainly don't dismiss it. And I look forward to reading your posts. They are as Indy puts so well, an effective counterweight to the blue sky POV so often expressed. Certainly very worthy of consideration.


That said, I believe the seperation point is that you are an advisor with a well researched POV to which you are convicted while others are just trying to trade the market. That's a huge difference.
 
Thank you for the kind words.
 
But you'll find that your perspective of the market improves when wearing a foil hat.
Mar 21, 2008 7:24 pm

So Indy are you saying you are posting to the web while in traffic?  If that's the case you are either the a great multitasker or enjoy this site a little too much.  Or both

Mar 21, 2008 11:31 pm

Ahhhh, but that's the beauty of having a wife who likes to drive...I got my turn later...

Mar 22, 2008 8:20 am
Indyone:

Ahhhh, but that's the beauty of having a wife who likes to drive...I got my turn later...

 
When we drive to Florida I always do 100% of the driving. Usually we're riding in Homer The Bondguy family tour bus. Weighing in at about 45,000 lbs, and forty feet long not counting the dinghy vehicle usually in tow, I don't know why my wife doesn't want to drive?
 
To drift further from the centerline of this thread, driving Homer has given me a unique observation point to observe people's driving habits and travel patterns.
 
For example: On long trips, like the one from Jersey to Florida or visa versa, I drive Homer at motorhome speed, 63mph. At this snails pace I'm safely in the right lane on cruise control as everyone speeds by in lanes to my left. One thing i do is look for unique cars with license plates from states far up or down the coast in our direction of travel. Maybe it's a pick up truck with a Motorcycle strapped to the bed or a flashy car of some type. Whatever it is, I notice them as they zoom by us at warp speed, 80 mph plus at 7am in the morning. Then I notice them zoom by us again at 11am. By 3pm when they pass us yet  again, the game has gotten boring. And the next morning with a look at my camera monitor I note that they are the car behind me in the toll lanes of the I-95 Bridge in Northeast MD. And so it goes, the tortoise truly does win the race. Every trip, it's the same thing, people racing down the highway at 75-85 mph when in reality, they are going much slower than that. If your destination is more than 200 miles in my direction of travel I know I'm going to see you again.
 
This actually drove home the Ironbutt Association's lessons about average speed versus moving speed. It shows how you don't have to be speed racer to cross the continent coast to coast in 50 hours. You only need be efficient. It also has been a valuble lesson for my kids. They know how slow I drive Homer. The point being, if you can't outpace me on a long trip when I'm doing granny speed, what is point of speeding? I've used this reasoning to instill a speed limit plus 7 mentality in them when cruising the interstates. I'd like to say the lesson has stuck. Wishful thinking?
 
Full disclosure: So I don't get in trouble with Mrs. Bondguy who sometimes reads my posts. There was one time when she backed Homer up about 30 feet. She never let's me forget that.
 
Indy, hope you enjoyed your trip.