Its often said that one shouldn't appeal to authority in a debate as it could be a fallacy. Thats only true sometimes. If the avg person plays a hand of poker in a certain way that way could be right or could be wrong but if Allen Cunningham says it was wrong, its almost certain that the person is a huge underdog to be right if he think he played the hand correctly Its the same thing if the avg ETer has an opinion on how to increase sales per sqt foot of a store in the long-run but Ron Johnson think its wrong
Who is getting "absolutely viciously attacked?" Value investing works because the market occasionally gives you an opportunity to buy dollar bills for 50 cents, as determined by a thorough and well-reasoned analysis of the assets, the opportunity and the risks, with an ideal situation being one where you could break up the company and sell the parts for a greater value than the whole, or where the replacement cost of the assets is significantly greater than current market value. Ron Johnson was successful selling brilliant, world-class products to the wealthy and upper middle class in a top of the line high concept setting. How that translates to turning around a beaten down middle-America has-been is damn hard to say. The word is that Johnson used the word 'Apple' an uncomfortably frequent number of times in his JCP turnaround presentations. But of course, that was why he was hired, and why the stock surged on his appointment... because investors somehow expected the "Apple magic" to rub off on JCP. The guy had a grand vision, took a big home run cut, and apparently whiffed. The rationale for AAPL's magic being transported to JCP never made much sense. And as far as value investing goes, it is a far cry from, say, the opportunity to buy a chemical company at such a depressed price that you are paying for plant and equipment only, with the value of the franchise, inventory and customer relationships thrown in free. Real value opportunities, once the balance sheet case is laid out, don't require tortured rationales about who hates what or what some hotshot new management can do. And usually they don't turn up on the first or second 10% sell-off either, with a protracted "left for dead" period a part of the equation more often than not. My opinion, since you are going to assume the worst of me anyway, is that you have this weird fetish for catching knives on a broad assumption that sharp selloffs are always 'mispricings', rather than a justified adjustment from a previous overvalued / overoptimistic state. A habit of seeing inefficiency everywhere you choose to see it can be worse than not seeing inefficiency at all. But hey, maybe Johnson pulls it out -- assuming he doesn't get fired first -- and JCP goes up lots and lots. HA HA HA... wow, seriously? You just referenced a cognitive fallacy, then played to the cognitive fallacy -- in lieu of actual argument -- and finished up with oblique ad hominem. That was almost impressive.
Actually I was arguing that bringing up an authority is not a fallacy in lots of situations. But your ego of never admitting you are wrong(except if hocus pocus technical 'indicators' tell you are wrong) made you think I was arguing against your constant quoting of gurus but I wasn't
I used today to add to my shorts and buy SPY puts. Nothing has changed fundamentally and the market's hopes for a significant dose of QE are in my opinion likely to be dashed. That said I'll be reducing my positions if the Fed does something dramatic and/or the market rises strongly in the coming days. Basically expecting the FOMC to be a sell-the-news event.
Probably a sell-off on a no QE3 annoucement, but if Operation Twist is extended I can see SPX closing flat on the day, maybe even slightly positive.
@Daal, why JCP and not something like say SPLS? I'd have to run the balance sheet numbers but a cursory glance at JCP has several issues that I don't like to see. Re: SPLS, I'm aware it's not an apple/apple comparision, something like GPS would be better to compare with, but at least you are buying something that isn't so highly leveraged and bleeding cash. Darkhorse makes a good point here, I've been wanting to buy solar names because they have just been beaten up so bad, but the outlook for solar is so grim that a potshot might still be throwing away cash. And to quote Ben Graham: 'there is investing, educated speculating and dumb speculation'. Are you able and confident to tell if which category JCP falls in?
Umm. I'm a trader who uses tight risk points, I admit I'm wrong on a regular basis. As far as debates go, I don't get involved in the first place unless I see a clear path as to why the position I'm taking is logical. I can't help it if the other side doesn't convince me... and when the other side does convince me, I happily concede. My sense of self worth does not reside in winning arguments. If anything I like being proved wrong, because such represents an opportunity to fill in a knowledge gap or otherwise strengthen my understanding and perception of the world... but you're not gonna do it through half-baked rationales and insults. Re, technical indicators, I would love to see you point out a concrete example of 'hocus pocus.' When it comes to technical inputs I am about as old school as they come, running almost entirely to price and volume, and using charts to paint an interrelated macro gestalt in terms of the scenario driven market script. Quite frankly, part of the reason I interact with you is because your methodology seems exhausting to me, and that makes me curious. I don't see how someone can keep arguing with the market on such a constant basis, with so little concreteness or evidence of systematic rule-based decision making in their processes, without being tired out. I don't believe the market is always right, but nor do I believe the market is always wrong. Price has a message, and often there is useful information in that message. Sometimes fading a large move is the thing to do, yes, when abundant evidence is available that the collective rationale of the marketplace is wrong. But you need a high hurdle of counter-claim evidence to make such a call. The times I have seen you make that counter-claim on this thread, your investigatory evidence has struck me as... well... unbelievably shallow. You are like a defense lawyer who keeps making bad cases for bad clients. Which is odd because, at least theoretically, you could pick much better clients. Maybe I just don't think much of your powers of analysis. I don't say that to be harsh -- at least not intentionally -- it is more of an encouragement. Surely you can make better arguments, can't you? Think things through a little more? Versus consistently resorting to fallacy and ad hominem. and blaming the other guy for being articulate and well read?
This partly relates to my casual assessment that one of Daal's inputs is drama. Where there is drama, there is a potential mispricing because lots of foolish folks have sold for the wrong reason -- or so the narrative goes. It's a little like being addicted to soap operas. Kurt Vonnegut: "...because we grew up surrounded by big dramatic story arcs in books and movies, we think our lives are supposed to be filled with huge ups and downs! So people pretend there is drama where there is none."
Latest post has an interesting view on market action re: the Fed announcement: http://markdow.tumblr.com/ Essentially he is in agreement with what seems to be the consensus here on what the Fed will do: nothing significant as they understand the 'true' dynamics of how QE affects the markets, and thus plan to hold off until there's more bang-for-buck available. Yet he is rather more bullish on the short to medium term market action. The thing for me is that, assuming the market is eventually due for lower prices/valuations, it's simply not possible to have every rally continue to the point of maximum bullishness (which tends to mean new highs for the year, etc.) - any sustained decline must perforce involve the market making lower highs, ending in less than hyper-bullish sentiment, etc. Whether we'll see that in this round or not, is unknowable...
Well to be fair he does seem to have a fairly well-reasoned argument beyond "BTFD," though I won't claim any ability to evaluate its merits.