Aug

24

ASK the CHAIR!

Q: Can anyone explain why I am constantly reading posts about possible entry points, buying times/conditions, number crunching stats as to undervalued situations, etc., when it has been absolutely clear to me that we are in the midst of a secular bear market? Mind you, this has nothing to do with personal sentiment or opinion; it is simply interpreting what I am seeing each and every day and trading accordingly. I am not a doomsday bear, nor do I have any biases; it is just amazing to me how many established professionals are still trying to buy buy buy at every possible juncture day to day. Does anyone who calls themselves a trader ever short overvalued stocks/markets/moves? How many rallies do you need to see fizzle into oblivion to prove what we are in the midst of? (Obviously, there are specific sectors and stocks that rise at specific times or under specific conditions and certain short term trading styles where you can be as bullish as you wish; I speak of the market condition in general.) Why have I been able to count on one hand the number of times I have read of any bearish play or overvalued situation? Doesn't this market call for at least some posts of a great short on some overvalued garbage? I am aware that everyone has their own style, but I find it incomprehensible as to why I continue to hear predominantly of bullishness. I'm open to your reasons.

Chair's response:

A personage who is absolutely convinced that we are in the midst of a bear market inquires why he finds so little company on our list besides those obviously talking their book. The reason is that most people on this list have read "Triumph of the Optimists" and "Practical Speculation," and both books emphasize the long-term 10%-a-year upward bias in all stock markets in all countries. That's the reason at a theoretical level. At a practical level, I would add, and this is just personal based on my observations of many years in the business, as well as exposure to almost all major hedge fund managers, including one who hates enterprise as much as Buffett — yes, I would add that the reason we don't hear from those absolutely convinced that we are in the midst of a bear market is that they have been, are or will shortly be, broke, morally and financially, metaphorically speaking. Drinks on me.


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6 Comments so far

  1. Steve on August 24, 2015 11:28 am

    There is a natural tendency in people to see things as they want to see them, and not to see things as they actually are.

  2. Arthur Barbato on August 24, 2015 12:31 pm

    Bought early and deep this morning. STOP Loss at today’s low. Hashtag in honor of Larry R. Williams #NoHardFeelings

  3. Mark Johnson-White Glove Moving on August 24, 2015 5:29 pm

    Hi Victor,

    A stunning event on TV today. Harry Dent comes out and starts talking about Dow 6000 and how he has been calling for etc., etc., etc.,
    AMAzingly on live TV a UBS analyst goes wild and says Harry Dent is full of it(and he was really loud about it) -He says Harry Dent was calling for the market in December 1999 to rise to 30,000 in 2 years and that it was undervalued –or something along those lines. The UBS analyst got so carried away with discrediting Dent that he ate up all the time available.
    a remarkable event to watch…

  4. Richard E. Barsom on August 25, 2015 8:35 am

    mark

  5. Steve Leslie on August 26, 2015 10:39 pm

    I have been away for sometime but as Jacob returned to his brothers It is my hope that I am welcomed back to this esteemed group. So much of my success in life I attributed to the lessons I acquired here.

  6. Ed on August 26, 2015 10:52 pm

    Arthur u might want to check the forward expectation of your stop loss level given the initial conditions or entry signal. My bet is it more positive than the initial signal.

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