Jul

26

4 Pres1. With all the talk about Harvard's cutting expenses and no longer serving hot breakfasts to its students, and making the buses run every 20 minutes rather than 10, leaving the cranes amast like Thailand in 1997 in the halted Allston expansion, one wonders if Professor Gates's driver who helped him enter his house is a perk that distinguished professors can still claim or if this driver was a new recruit, from a service, who was willing to go above and beyond the pale for a stranger.

2. Looking at the performance of the major indexes to date, one notes that the three biggest markets are up 1 to 10% and the average of the 150 medium markets is up about 40%. What is the explanation for this divergence other than the ruination of incentives, and the adjustment of price levels to equal after service returns in the future? Israel up 3% over nite and 44% on year to date gives good precis of what would have happened.

3. The Nikkei broke 10000 at the open today and hasn't looked back trading at 10135 as we speak and how long will it be before both the Nikkei and S & P trade at the same price again?

4. The Nasdaq leads the S&P the way a horse leads a carriage.

5. The Dow has gone thru 9000 with aplomb and it will be interesting to see how long it takes to get to 10000. It took four trading days to go from 10325 on 10 03 08 to 8579 on 10 09 08.

6. The GaveKal people have been right as rain this year, and always have an antidote to any bearish sentiment or ideas that anyone might make.

7. I am reading Bayesian Models for Categorical Data by Congdon and am pleased to find many references to the work of Leo Goodman from the 1960s still carry the day, but find the chapter on time series analysis somewhat dull and labored except for an intriguing reference to integer time series analysis.


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4 Comments so far

  1. Steve Leslie on July 27, 2009 2:49 am

    Re 1, Golden Slacks at 45 and MS at 6 were once in a lifetime buys at the first of the year. The Oracle is regularly beaten here but his research on GS was spot on. His timing was a bit off but his thought pattern sound.

    Re 2, Is this the new contrarian indicator? Harvard cutting back breakfasts and running busses at longer intervals. Reminds me of Jimmy Carter's solution to the energy crisis of wearing a sweater and lowering the tenperature in Federal Buildings in the winter. Oh a fixing your carburetors to run a leaner mixture. Real genius here!

    Re 4, Great metaphor, and doesn't it make sense. I suggest the NAZ is telling us that we will have a much better holiday season this year than last. Might it also suggest that inventories have been sufficiently depleted and must be restored. Six months ago rumors of Apples demise were greatly overstated.

    Re 5, These things can take on energy quickly,witness the big moves in the 90s when round numbers were reached in months rather than years. Question in my mind is: can the bulls continue to run in a jobless market and dead real estate across the country. When does the argument shift from things are not as bad as they once were to where is the growth. Somebody explain to me the statement "there is the manure, now where is the horse?"

  2. SG on July 27, 2009 8:20 am

    What "ruination of incentives"? The "incentives" to disguise and sell junk as AAA and the other "incentives" that got us here the first place? Or incentives as in taking away the bankers' pay? Well, that hasn't happened; has it (not that it should). GS just announced the largest bonus package for its employees ever, as have several other biggies. So the incentives have not been ruined. They are very much still there. And no tax hikes have yet been enacted. So, a much less political explanation for the divergence between the three largest markets and the 150 medium ones is possible: the economic problems have been far more devastating and serious in the three markets than in the 150, and the markets recognize that.

  3. david higgs on July 27, 2009 8:12 pm

    sg, the bonuses are paid for pulling off the greatest heist in all of mankind they’re colossal and always will be……as for market performance, Peru is up near 100% for the year, maybe BO is on to something there in Darkest Peru other than the sex and great real estate deals…………and Barrons this Sunday tell us were on our way to 10K, too!

  4. amit on July 30, 2009 2:44 pm

    Hi Victor
    This is Amit from New Delhi India.
    Just learned about your website from Brett N steenbarger’s book and i am fascinated to have learned about you.

    I think i have found a person from whom i can learn really great lesson.

    Really greatful for the good work you have been doing all these years.

    Thanks

    Amit

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