If what I wrote is not fundamental analysis... regardless whether I am right or wrong.. please shed light on what your interpretation of fundamental analysis is. thanks, --MIKE
Analysis means you take facts and interpret it by a theory. You relate the facts to some context, to history. You need to go beyond what the superficial facts present and gain some insight as to what is happening. The standard 'hell in a handbasket' list is the same kind of stuff they were saying in the 70's. There were wrong then. I don't know if they will be wrong now, but I do know this kind of thinking is useless. When people say every new gain in the stock market is a bubble, it really means that they do not know what a bubble is. It also means that their constant predictions of bubbles contain no information. Yes a broken clock is right twice a day, but the clock is still broken and can't be used to inform you about time. (In fact by any real definition of a bubble, we are NOT in a stock bubble, but in an anti-bubble regime (the regime possibly changed in Jan 2004), according to objective measures of bubble-ness.) Look what happened in the Victorian age. Pre-immunization levels of plague and sickness. Massive wars, loss of empires, march of communism, rise of Darwinism, dislocations from technology and many investment bubbles with inflations. Our age is fairly tame compared to all that.
The name of the thread is a bear case. Besides telling me that my analysis is wrong and that I am not using fundementals... u still failed to give me one piece of evidence suggesting why. The only thing that u have admited to counter my arguments is that u dont know if I will be wrong. If you read my comments carefully I am not saying that we are in some type of bubble and we will pop as far as the stock market goes. Thats not my rational. I am saying that the fundementals in the US are completely deteriorating. One thing that u will learn is that markets dont only go down to correct a bubble. They also go down when the fundementals stink. --MIKE
Fundamentals are always deteriorating. Show me a period where the doomers say- "This is it. Things are great. Invest now." There is no such period. Doomers sell fear. They say the same things all the time. They are a broken clock.
Your point only makes sense if u continue to use flawed logic. I am not someone that has been a bear all my life. After the Iraq war I went long and made nice coin. Markets broke out of major base and I nailed a good portiion of the move. My analysis pointed to an economy which would be flooded with money and the Fed was desperately trying to prop the economy.. which it succeeded. I did not wanna bet against a Fed that has a repuation of being reckless and i knew he would get the results they wanted. But now the bag of tricks are over with. No I didnt start threads building a bullish case because i knew that the recovery was bogus and doubted that it would last too long. Well it lasted 1.5 years and now we are back to reality. After the dog pile in Jan. and after good news was being faded by the market I knew the best has already been priced in.. and building a long term short was prudent.. because the trend was over. The truth is that u just dont understand what is going on right now in the US economy. Thre is no point in debating with u because u dont bring any facts or insight to the table. --MIKE
Oh my G*D ... Asia is looking nightmarish today. Even though I ate some losses last few days, so glad I baled over the course of this morning. This is one serious sell off folks. Kospi was down -8% at one point, Nikkei -6%, Taiwan -3.5%, Hong Kong's China index -6.6%. My bet is that a major trend reversal was initiated last week. Things are going to get bad in China, and that is going to hurt every major global market.
Blue, it is indeed starting to look ugly out there and earily reminiscent of 2000. Perhaps Rich Bernstein will be vindicated after all. With regard to the bear case, setting aside the sky is falling arguments, declining growth (albeit still strongly positive) combined with higher rates means lower multiples. It's as simple as that. So while there will still be plenty of opportunities to make money on the long side in such an environment, the easy, mindless throw money at anything and it will go up phase appears over. In other words, a return to rationality.
I agree. Obviously these recent moves are symptomatic of a major global macro change affecting multiple asset classes. In this case, rising US rates, combined with slowing China demand affecting Asian markets. That is the stuff that bear markets are made of. S&P <1000 is a distinct possibility IMO. The fact that few people seem prepared for that outcome should set alarm bells ringing.
The major funds - pensions, Fidelitys etc. - are selling with conviction in Asia after a year of consistent buying. I'm expecting this selling to continue for a few months - typically it lasts through the end of September. We might continue descending into the September / October period. Fortunately these funds sell over time, as in weeks and months. Thus us small timers have plenty of opportunity to jump out in front. The time is now, but it will take patience as June/July can be bumpy. By August we should be in a convincing descent. If we are not, then something must have changed and I will need to re-evaluate.