Any shorts left?

Discussion in 'Trading' started by bluematrix, May 6, 2013.

  1. #11     May 6, 2013
  2. First off, I am pretty bearish on the global economy like a lot of you. However I am not sure if that means there is a big pullback in the cards. I had a quarterly call today with one of our mid cap institutional managers and he was as bullish as could be. He acknowledged a lot of the cases that bears have been making (Europe, the job market, sovereign debt levels, etc..), however he was still maintaining that we go higher, or at worst flatten out, but didn't see any meaningful pull back in the near future. His rationale was the current interest rate environment. With rates so low, the money has to flow somewhere, and the only place to go is into equities. The smart money is borrowing at close to zero percent and investing the proceeds into businesses that are returning 5% or greater ROE in free cash flows. It makes sense when you think about it. Many retail investors or small traders see the market as ridiculously over bought and at unattractive levels, but big money managers have to put their money somewhere. Bonds yield nothing, treasuries yield nothing, real estate is still in limbo so the only obvious place to put your money to work is in stocks. The only way this cycle changes is when either interest rates start to rise, or companies start to become less profitable. Right now the economy is limping along, and demand is not strong enough to support capital expansion and job growth in the corporate sector, but it is meager enough for efficient companies to still turn out attractive enough profits that provide enough return to entice investors out of going to cash.
     
    #12     May 6, 2013
  3. i just got to the point were i feel people are brainwashed into buying saying the fed has our backs and that's the perfect setup to catch everybody off guard. it just looks to good to be true.
     
    #13     May 7, 2013
  4. swcom

    swcom

    Layoffs > up
    Guidance > down
    Revenue > up
    Profits > down
    Cash > up
    Capex > down
    Buybacks > up
    Splits > what is a split?
    Markets > up
    Confidence > down
    Liquidity > up
    Credit > down
    US Economy > uhh, Paging Dr Bernanke. Dr Bernanke to the E.R.
    Global economy > down
    China > waiting for that shoe to drop, but it keeps levitating
    Europe > Down, and lifeboats are sinking

    RETAIL INVESTOR: You keep hearing people (Jim Rogers, CNBC guests, etc.) saying don't jump in to the market and buy at these levels. Then prices go up, then the retail investor does some research and learns that the market is a a forward-looking indicator. Jump in, get slammed, which is where we may be very soon (or just coasting past the off-ramp on fumes.)

    CASH-POOR-AMERICA: Baby-boomers are not broke. Most of their Depression-era parents saved every penny and did not die broke. If they did, things would be a little different now. This is not hard and fast, but people are just not broke out there. You keep hearing about how bad it is, then you hear about all the money on the sidelines. If there is money on the sidelines, then the economy can not be that bad right? Jobs are another discussion altogether...

    Now, if I hear one more word about the current housing "wealth-effect", and rising home prices as some sort of rationale for the economy turning a corner, I am just going to pack it in and move to {insert your choice here}________________________.

    Don't buy now (-savvy investors);
    Don't wait and sit on cash, how ridiculous - you'll miss the whole move (-every money manager/broker);
    sell, Sell, SELL! (me)
     
    #14     May 7, 2013
  5. As Jeff Gundlach has said, QE is a put on bond prices, not stock prices.
     
    #15     May 7, 2013
  6. Handle123

    Handle123

    I have gone short big S&P500 three times since early April and took profit of 40pts on half once and the other trades worked out to breakeven. I will continue to short on contract highs as per to my system rules. I have no idea where it is going and neither does anyone else. Right now am flat, but if market makes higher highs Tuesday...
     
    #16     May 7, 2013
  7. Butterball

    Butterball

    Neither was any sensible buyer in 1999. Still the Nasdaq gained 50% before imploding 80%. Similarly during the 1926/1927 recession US stocks rallied 50% before imploding in 1929.

    Stocks are expensive and probably offer weak long term returns but that doesn't mean they can't go much higher.
     
    #17     May 7, 2013
  8. nursebee

    nursebee

    Lots of folks arguing with price!
     
    #18     May 7, 2013
  9. tortoise

    tortoise


    Wisest words on this thread
     
    #19     May 7, 2013
  10. pfranz

    pfranz

    I don't understand.
    If he acknowledged a lot of "bear" cases,how can he be "as bullish as could be"?I would expect him to be something like "a bit bullish".
    "The only place to go is into equities": which equities?those from countries with debt problems? And how about:
    - emerging countries bonds and house markets?
    - emerging countries stocks?
    - u.s.,panama,germany,even switzerland house market?
    - high interest savings accounts?
    - raw materials?

    I'm not saying stocks can't go higher,I simply don't understand this type of rationale.
     
    #20     May 7, 2013