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osborta (99.92)

Bears coming out of the woodwork!

Recs

6

May 08, 2009 – Comments (10) | RELATED TICKERS: COP , GE , MEE.DL

For any bull market to be successful, you need a significant contingent of naysayers - those "experts" who often have significant success stories - famous "calls" in their repertoire, telling us how the market is overvalued and acting "crazy".  When you stop hearing those voices, beware!  But as long as the naysayers have the floor, the Bull can run.  It's almost like the bull needs someone to gouge.

 But I still measure my stocks the way I always have, and most of the companies I own could still double in share price and have reasonable P/E ratios.

 On a personal note, my CAPS score has gone from Beaniecap-worthy-sub-20 last month to 91.5 today (whoohoo!).

 I stand by my favorites - COP, GE and MEE, though the latter two have more than doubled from their lows (set just a few weeks ago!!) already!!

 Happy Investing!!

 

10 Comments – Post Your Own

#1) On May 08, 2009 at 4:34 PM, SkepticalOx (99.44) wrote:

Um. What exactly are you basing this indicator on? The bears were there when the DOW was at 14,000. They cried wolf and no one cared to listen, so they shorted the crap out of almost everything in sight and made huge money.

Expert analyst asides, I haven't heard ONE GOOD argument yet at why this rally is based on sound fundamentals. I haven't heard one good argument that we are out of the woods. All I hear and read is "I just doubled by portfolio in the past month, so everything must be fine!".

So please. Enlighten me with your reasoning behind why the bull market starts now, and its not just a bear-market rally. 

"Be fearful when others are greedy and greedy when others are fearful"... Yeah, there doesn't seem to be much fear right now except for the fear of missing out on this rally. 

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#2) On May 08, 2009 at 4:58 PM, russiangambit (29.90) wrote:

It is a spelling error - it should say "bulls coming out of woodwork". I haven't seen so many bullish comments in a while. Since last spring, at least.  I think, I am going to start tracking, how long it take between the appearance of bullish comments and the crash, and how deep it will be.

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#3) On May 08, 2009 at 5:16 PM, jstegma (29.89) wrote:

Yeah, there are definitely a lot more bulls now than there were at Dow 7000. 

Right now the market seems like it's in "Everything's gonna be okay" mode like it was in October 2007.  The rally made sense from about 6500 to maybe 8000, but since then it's been a little overdone in my opinion.  

I'm definitely a bear at 8500 right now.  If it goes back below 8000 I'll start to chill out.  If it goes below 7000 I'll be a bull again.

 

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#4) On May 08, 2009 at 5:19 PM, wuff3t (97.33) wrote:

"All I hear and read is "I just doubled by portfolio in the past month, so everything must be fine!"...."

Doubling your portfolio seems pretty fine to me, especially in a month. That's a record even Buffet would envy...

But seriously I agree, it's hard to get too excited when the fundamentals of the global economy are so bleak. I do think there's plenty of fear around though, just a surprising amount of optimism diluting it. If your view is long-term then there are huge bargains out there, otherwise I think people should be prepared for disappointment.

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#5) On May 08, 2009 at 5:25 PM, osborta (99.92) wrote:

See what I mean?  The simplest comment seems to have brought out at least 3 bears.  Notice no comments saying "Amen, brother!  Next stop Dow 10,000!!!".  If you saw that, you should be concerned.  :-)

 Happy Investing!

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#6) On May 08, 2009 at 5:34 PM, SkepticalOx (99.44) wrote:

"In the short-term, the market is a voting machine, while in the long-term it's a weighing machine" -Ben Graham

Getting a huge surge in your portfolio in the last month has more to do with luck and randomness than with skill. Unfortunately, too many people use this tiny data point of their past 1 month performance as confirmation for their superior stock-picking skill or their new gift of economic foresight.

I'm not complaining about the recent rally in my own portfolio, which has made up a lot of what I lost last year. But I haven't yet heard any news or any reason why this rally is not a bear-market rally. That's all.

In the long-term scheme of things, if you believe the U.S. will eventually recover and prosper, than yes, stocks are cheap now. Never mind the short-term moves if you are investing for the long-term.

But these bulls gotta quit acting like they know something about short-term market movements because of their recent performance, or that the shorts are wrong because they lost out in the past few weeks.

The market can stay irrational for a very, very long time. 

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#7) On May 08, 2009 at 5:48 PM, nottheSEC (78.00) wrote:

Hey I am bull but a cautious one because I hear a huge majority collective of all stars saying the sky is falling. As for me I believe the recession is over and posted it twice. I just think the recovery will be the slowest in US history and the market will not fall but go up slightly and be volatile.My latest post below. I do not think that the bears are coming out the woodwork They been here all along this rally.  http://caps.fool.com/Blogs/ViewPost.aspx?bpid=191788&t=01003160625517763486

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#8) On May 08, 2009 at 8:40 PM, portefeuille (99.78) wrote:

Beware of the All-Clear!

The All Clear

Pros Say: Stress Tests Not an ‘All-Clear’ Sign

Jaidev Iyer, managing director of the Global Association of Risk Professionals, sees "an all-clear signal but the all-clear signal is not coming from these stress tests."

With the Wicked Witch of Depression now apparently crushed under the house of Obamanomics, the Munchkins of Wall Street have sounded the all clear, pushing the Dow Jones up 25% from its lows.

I'm choosing all the banks that got a passing grade on the stress test. I'm not convinced that this is an "all clear" for these folks, but I think the market may take it that way.

In their simplistic minds, it probably goes “Raise money, Go home. All clear. Game over. Recovery time. Buy stocks.”

etc.

"all clear" appears to be the "phrase of the day" and quite often in articles that claim that there is "too much optimism" among "investors" ("everybody thinks that 'all is clear'") and that this is to be taken as a contra-indicator.

I get the impression that the ratio of "optimists" to "those claiming there is too much optimism" is still comfortably small ...

 

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#9) On May 09, 2009 at 12:32 AM, osborta (99.92) wrote:

Well put, portefeuille - that is exactly my point.  There still is a lot of negativity - more negativity than optimism, and even, as has been stated, the optimism is muted and cautious.  That's a good thing!

Anyone wanting "proof" that the worst is over should look elsewhere - last time I checked, only one knows the future, and I'm not Him!!

I measure stocks the way I think Ben Graham and Warren Buffett do - in fact - 2 of Warren's latest big picks are GE and COP, companies that have been my favorites for years.  I'm still waiting for that whole "weighing machine" to kick in though - with single-digit P/E's on most of my shares, the votes are still being cast in the negative on the whole.

 I actually took advantage of the recent run-up to do some hedging and increase my cash position - so if we have a significant pullback, so much the better!

 Happy Investing!

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#10) On May 09, 2009 at 12:42 AM, automaticaev (43.11) wrote:

if i could leverage my money 10 to one and buy stocks i woulde been rich years ago.

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