Oct

20

 It was only 17 months ago when Alan Abelson passed away on May 09 and moved to bear heaven after writing his "Heard on the Street" column for 53 years, during which after reading every one of his columns the collab and I concluded that he had not once been bullish. After the October 19th, 1987 crash, for example, he concluded that with the Dow at 2000 that the decline of 25% was just a (hopeful) start.

I stand by the comments made in Practical Speculation that he did more harm than anyone else in the history of markets by his consistently bearish views while the average stock rose some 15 fold. He was so persuasive and so many followed his bearish views and stayed out of stocks because of them. Thereby decimating the alternative path of their wealth. Furthermore, to add insult to injury he was much too gallant with the collab when she interviewed him in 1999, a predilection which one is told was not limited to attractive former Bloomberg stock market columnist heads.

Since he passed away, there has not been much that he would have enjoyed until this week. As the Dow has advanced fairly steadily from 15000 to 17200 in a typical 10% a year rise. However, almost a correct of 9.5% from high to low occurred this week, and if the Good One could arrange it, the wordful commentator would have been dancing on his grave.

However, I was pleased to see that his spirit lives on in Barrons with some very sonorous and seemingly sagacious commentary in the 10- 20-2014 issue of Barrons. Randall W. Forsyth refers to the Fed "running out of basis points". You see "so called quantitative easing seemed spent… Leveraged speculators, hedge funds as they are called in polite company were hemorrhaging losses on bad bets… that was the setup for nothing short of a paroxysms on Wed morning in the treasury market… in a manner reminiscent of the infamous flash crash of May, 2010… the collapse in bond yields far from being a rally had all the earmarks of a panic - in the opposite direction. Two presidents of Fed banks, from cities on opposite sides of baseball's national league championship series said the Fed might reduce the timing of tightening. A 'bullard bounce' ensued. The new media seems to have adopted the motto of never letting the facts getting in the way of a good story at least in the reporting of Ebola: 'the backdrop remains geopolitical and epidemiological' ".

In other columns Kim Forrest opines "the market is getting to be like a daily soap opera" as Vito Racanelli quotes in The Trader. "It was a low but I'm not sure that it was the low," Forrest says. Other articles pointed to $75 oil and in Market Watch, the lead advisory opinion noted the correctness of previous bearish forecasts and the similarity to the 1997 action. With a Dow 1738 low being a logical target.

There is much of interest in Barrons and they had many articles pointing to bargains galore among the hard hit stocks. However, whenever the market suffers a near Correction (down 9.5% from a high), we must remember the futile efforts of the former wordsmith Alan Abelson who never bought individual stocks, and think how happy he would be with the decline, and how he would remind readers of how happy he has been with his previous and undiminished bearishness.

Anatoly Veltman writes: 

Has a study ever been performed on the extent to which his multi-decade biz had proven profitable? If his biz results proved consistent (over a very lengthy period, spanning changing regimes no less), would that of itself be fruit for thought?

anonymous writes: 

Even though one hardly listens to brokers, mine predicted this move beautifully. The market will do what it takes to hurt most. It will get the weak hands to sell in panic and won't let those waiting on the sidelines participate in the bull market. How will the market achieve this? It will go down hard few days in a row, flushing the weak hands out. Those waiting on the sidelines have their bids at 10% off the highs. The market will go down just short of the 10% and will move right back up. The weak hands are out and the sideline wise asses won't get a chance to jump in. By the way, Mr. Saad, did you notice that the best performing account you have is the margin account you forgot all about over the last 6 years. Think about that for a second…

Steve Ellison writes: 

One suspects many permabears have successful advisory businesses because they satisfy some deeper longing in their clients than to invest profitably.
 


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