GMO's quarterly letter

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Feb 5, 2010 10:15 am
Shania Twain:
NYCTrader:

By the way Shania, the name I went long yesterday was WFR.







 
wfr
yikes. 
not my cup of tea
William o neill is my daddy
 
(i have my eye oin the ubekastan 10 yr today.  could be huge.  bwhahahahahahhahhaha)
 



Love the company.  Amazing value under $12.

Feb 5, 2010 1:42 pm
Magician:
NYCTrader:
Shania Twain:

  need to hold 1071.    

 



1071 looks precarious.

Tomorrow could be a bloodbath when the revised jobs numbers come out.

http://www.bloomberg.com/insight/birth-death-model.html



Unemployment rate was a lot lower than expected.



Bloodbath.

Feb 5, 2010 1:48 pm

good time to buy

Feb 5, 2010 2:41 pm
B24:
NYCTrader:

There's a place in NYC called Shake Shack that makes a damn good cheeseburger.Also a fan of In & Out in LA. Moraen, I'm not always a bear. Just a bear right now. I'm actually bullish on a few individual names.



Mmmmmm, Shake Shack. My sister lives right down the street. That shat is good.





is she hot?

Feb 5, 2010 4:12 pm
NYCTrader:




Bloodbath.







Could not have asked more a more perfect day.



1045 intra day



bears RABID



ireland default   

bwhahahhahahahahahhahahahahahahah



Thank God those bills went off in Yobeckastan

bwhahahahahahahhaha



2002 missed bubble

2008 missed bubble



2010 "they wont get me again"



Ill get out before next BUBBLE



no bubble



classic







keep your eye on Slovakia

Feb 5, 2010 4:34 pm

NYC - wasn't quite the bloodbath your were expecting I imagine.

Feb 5, 2010 4:49 pm
Moraen:

NYC - wasn't quite the bloodbath your were expecting I imagine.



Not at all what I was expecting.  That last hour rally was impressive.  There was a rumor floating around that the ECB will announce a bailout of Greece over the weekend.  Not sure if that's what triggered it.  Or if the consumer credit numbers released at 3:00 beating expectations (which was still pretty weak, IMO) did it.  Or if the bulls have simply regained control...

This doesn't change my macro view.  Still bearish.  Think fair value on the S&P is closer to 900.  Will take positions in individual names as my price targets are hit on the way down.  Incredibly bearish on China.  Got long again on USD v EUR a few weeks ago.  Gonna hold that to 130 or so. 

Feb 5, 2010 5:15 pm

Yeah,  it looks like it was a short squeeze based on the ECB news on Greece. 

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHWYxn1VA98A&pos=1

Monday will be interesting if this rumor fails to materialize...

Feb 5, 2010 5:29 pm

western europe debt "issue" is the stupidest bunch of jedi crap ever.     funny



ummmm hello.    spain aint leh.     duh



dollar rally nicking John Kerry trade.   

look at names that got hit.

look at copper, gold etc

dollar bounce done

all good.

took a bunch of froth out

shake out some weak hands

its over

get long







Feb 5, 2010 5:36 pm
NYCTrader:

Yeah, it looks like it was a short squeeze based on the ECB news on Greece. http://www.bloomberg.com/apps/news?pid=20601087&sid=aHWYxn1VA98A&pos=1Monday will be interesting if this rumor fails to materialize...







Greece gdp = 343 B



WMT's revenues = 420 B

Feb 5, 2010 6:00 pm

Sorry Shania, I'm not joining the bulls based on one hour of trading from 3:00-4:00 pm on a Friday when shorts got spooked going into the weekend because of a rumor the ECB is about to take the unprecedented step of bailing out a sovereign nation. 

That isn't the signal I'm looking for.
 

Feb 5, 2010 6:11 pm

Jobs situation is improving.  As all bears have said, that is the key.


Feb 5, 2010 7:57 pm

Year Earnings Yield Dividend Yield S&P 500 Earnings Dividends

1960 5.34% 3.41% 58.11 3.10 1.98

1961 4.71% 2.85% 71.55 3.37 2.04

1962 5.81% 3.40% 63.1 3.67 2.15

1963 5.51% 3.13% 75.02 4.13 2.35

1964 5.62% 3.05% 84.75 4.76 2.58

1965 5.73% 3.06% 92.43 5.30 2.83

1966 6.74% 3.59% 80.33 5.41 2.88

1967 5.66% 3.09% 96.47 5.46 2.98

1968 5.51% 2.93% 103.86 5.72 3.04

1969 6.63% 3.52% 92.06 6.10 3.24

1970 5.98% 3.46% 92.15 5.51 3.19

1971 5.46% 3.10% 102.09 5.57 3.16

1972 5.23% 2.70% 118.05 6.17 3.19

1973 8.16% 3.70% 97.55 7.96 3.61

1974 13.64% 5.43% 68.56 9.35 3.72

1975 8.55% 4.14% 90.19 7.71 3.73

1976 9.07% 3.93% 107.46 9.75 4.22

1977 11.43% 5.11% 95.1 10.87 4.86

1978 12.11% 5.39% 96.11 11.64 5.18

1979 13.48% 5.53% 107.94 14.55 5.97

1980 11.04% 4.74% 135.76 14.99 6.44

1981 12.39% 5.57% 122.55 15.18 6.83

1982 9.83% 4.93% 140.64 13.82 6.93

1983 8.06% 4.32% 164.93 13.29 7.12

1984 10.07% 4.68% 167.24 16.84 7.83

1985 7.42% 3.88% 211.28 15.68 8.20

1986 5.96% 3.38% 242.17 14.43 8.19

1987 6.49% 3.71% 247.08 16.04 9.17

1988 8.69% 3.68% 277.72 24.12 10.22

1989 6.88% 3.32% 353.4 24.32 11.73

1990 6.86% 3.74% 330.22 22.65 12.35

1991 4.63% 3.11% 417.09 19.30 12.97

1992 4.79% 2.90% 435.71 20.87 12.64

1993 5.77% 2.72% 466.45 26.90 12.69

1994 6.91% 2.91% 459.27 31.75 13.36

1995 6.12% 2.30% 615.93 37.70 14.17

1996 5.49% 2.01% 740.74 40.63 14.89

1997 4.54% 1.60% 970.43 44.09 15.52

1998 3.60% 1.32% 1229.23 44.27 16.20

1999 3.52% 1.14% 1469.25 51.68 16.71

2000 4.25% 1.23% 1320.28 56.13 16.27

2001 3.38% 1.37% 1148.09 38.85 15.74

2002 5.23% 1.83% 879.82 46.04 16.08

2003 4.92% 1.61% 1111.91 54.69 17.88

2004 5.58% 1.60% 1211.92 67.68 19.407

2005 6.12% 1.79% 1248.29 76.45 22.38

2006 6.18% 1.77% 1418.3 87.72 25.05

2007 5.62% 1.89% 1468.36 82.54 27.73

2008 7.24% 3.11% 903.25 65.39 28.05

2009 5.35% 2.00% 1115.1 59.65 22.31





2010 SPX earnings $80 ish!!!!!



subprime? back window



new normal this Billy boy



    stocks cheap

Feb 6, 2010 11:12 am
AGEMAN:
suspended:

good time to buy

Thanks ML Gone

Looks like an avatar you have used anyway





Hope you bought!

Feb 6, 2010 2:47 pm

In this environment, i would have expected to see a selloff on a Friday afternoon with market participants not wanting to be LONG over the weekend. Not the other way around. Tells me there is good underlying strenght here.

 
Does anyone really expect that Greece or any other PIG will default on their debt? C'mon, the world isnt going to let that happen. EU will step in and if necessary, other countries, World Bank, whatever. We've already seen that the powers that be will do what they have to do.
Corporate balance sheets are stronger than ever, companies are lean as they can be in costs structure, dividends are rising again, jobs which are a lagging indicator anyway, came in better than expected yesterday. Q4 earnings are beating all over the place. Everyone is buying technology, (the products, not just the stocks). Capital flows to innovation, and the U.S. innovates.
The emerging economies story is old, maybe a little long in tooth, but still true and intact longer term
http://www.youtube.com/watch?v=jpEnFwiqdx8
Short term cautious? maybe, but i have a feeling not. I'm a bull looking out past my nose. No Armeggedon
Feb 6, 2010 9:01 pm

Won't disagree with your SHORT term viewpoint AGEMAN. I lightened up a bit end of the day Friday for appropriate clients.

I think any client who is in their 40's early 50"s and has the ability to add on dips, can ignore whats going on right now. Others do need to be more careful.
Feb 6, 2010 9:42 pm
Sportsfreakbob:

Won't disagree with your SHORT term viewpoint AGEMAN. I lightened up a bit end of the day Friday for appropriate clients.

I think any client who is in their 40's early 50"s and has the ability to add on dips, can ignore whats going on right now. Others do need to be more careful.





agreed. But I know 12 months from now the market will be higher. Time Frame boyz

Feb 6, 2010 10:36 pm

08-09 scared people BIG TIME.



perfect trap

late 08 death sell off

then a calm



then feb mar 09 BLOODBATH



SO MANY got out



so many with cash at 0% now



1070 break was no so hot.

bet it holds

friday's action says it all



money LOOKING for a home



new highs



intra day friday (1044?) is the low (like july 7)



repeat:



GREECE gdp 342 B



WMT's revenues    420 B





F greece.   Its post tramatic bear market syndrome   





EVERYONE LOOKING FOR NEXT SHOE TOO FALL.



its comical

watching CNBC



Showing the GD Latvia bond auction



aint gonna happen



too easy. too many would be right



Feb 6, 2010 10:39 pm
suspended:




Hope you bought!







mel,



your a bull.



come clean brother.

your welcome on bull money train

Feb 7, 2010 8:58 am
Shania Twain:

western europe debt "issue" is the stupidest bunch of jedi crap ever.     funny



ummmm hello.    spain aint leh.     duh



dollar rally nicking John Kerry trade.   

look at names that got hit.

look at copper, gold etc

dollar bounce done

all good.

took a bunch of froth out

shake out some weak hands

its over

get long






Shania, you want to short the USD vs EUR, be my guest.  The more I research this, the more bullish on the USD I become.  In fact, I wouldn't be surprised if we see 1.20.  ECB is backed into a corner.  They have to do something about Greece.  But as soon as they do that, moral hazard kicks in and suddenly Spain, Portugal, Ireland and Iraly will have their hands out expecting the same (remind anyone of a certain bank/auto bailout in 08-09?)   Remember, the Euro is a relatively new currency and this is their first major test.  Not sure about you, but I'm betting most investors aren't going to want to hang around and see if the folks in the EU are going to be able to figure this out.  Greenback's going to be the safe haven of choice.  Get long USD.