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Mark910 (< 20)

My name is Mark and I am a Bear......My 12 step recovery plan.

Recs

36

June 07, 2009 – Comments (24)

This is a follow up to my Blog about being a bear found here-I've only had a couple, officer, really I'm fine.  It seemed so harmless at first; watching the S&P slip lower at the close.  But then I couldn't wait till the close and wanted it in the afternoon and then in the morning.  I would say"after all its 5pm somewhere in the world".  The first step is admitting you have a problem so yes-

Left to my own vices I would drink Tonic and DOW Drops in the morning, I would do Nasdaq Bubble Bongs at noon, and then sip Russle 2K slips at night.  Here is my 12 step plan for recovery. 

1.  Ignore PE ratios.  The non-existent S&P profits mean nothing.

2.  Don’t look at un-employment numbers.  More people out of work each month is healthy for the economy.

3.  Ignore the V-shape “recovery”.  This time will be different than any other 50% or greater correction in history and be V shaped.

4.  Ignore the fact that we are less than 2 years into this recession.  This time will be different than any other 50% or greater correction in history and last a little over a year.

5.  Ignore Treasury yields.  The government will buy them and interest rates won’t continue to climb.

6.  Ignore the slow down in Mortgage applications because of rising interest rates.  Uncle Sam will fix that too.

7.  Ignore the fact that the fed is buying treasuries.  It’s healthy just like using your Visa to pay your MasterCard.

8.  Ignore the deficit.  Everyone knows that the more you owe the more credit worthy you are.

9.  Ignore the un-funded obligations of Medicare and Social Security.  Those people are a burden anyways.

10.  Ignore the Banks crashing around you.  The FDIC will never run out of money and neither will the banks with government connections.

11.  Ignore the credit crises.  Money just gets in the way of running a good business.

12.  Ignore the worthless mortgage backed securities held by the banks.  We all know our houses will double in price next year to get us back to even.

 And so it is that simple to stay on the wagon.  I'm starting to sweat just a little and my hands are shaking.  Maybe just a little hair of the dog to steady my nerves......Now where are those historical charts....ah here we are 1929..1932..ahh what fine vintage.....

24 Comments – Post Your Own

#1) On June 07, 2009 at 11:33 AM, wingfold2001 (< 20) wrote:

Loved it!

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#2) On June 07, 2009 at 12:01 PM, djkumquat (46.96) wrote:

wonderful! thanks!

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#3) On June 07, 2009 at 12:28 PM, columbia1 wrote:

Have you tried that new drink, "Red Bull"?,

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#4) On June 07, 2009 at 12:29 PM, GoodVibe4Ever (< 20) wrote:

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#5) On June 07, 2009 at 1:24 PM, portefeuille (99.50) wrote:

1.  Ignore PE ratios.  The non-existent S&P profits mean nothing.

know what they mean.

2.  Don’t look at un-employment numbers.  More people out of work each month is healthy for the economy.

cost cutting is a feature not a bug.

3.  Ignore the V-shape “recovery”.  This time will be different than any other 50% or greater correction in history and be V shaped.

look at the chart. 1

4.  Ignore the fact that we are less than 2 years into this recession.  This time will be different than any other 50% or greater correction in history and last a little over a year.

at the March 2009 low the S&P 500 index calculated in real EUR was down ca. 75% from its March 2000 high. it has gained ca. 27% in around 3 months since then. 2

5.  Ignore Treasury yields.  The government will buy them and interest rates won’t continue to climb.

3

6.  Ignore the slow down in Mortgage applications because of rising interest rates.  Uncle Sam will fix that too.

don't give too much importance to daily news flow.

7.  Ignore the fact that the fed is buying treasuries.  It’s healthy just like using your Visa to pay your MasterCard.

4

8.  Ignore the deficit.  Everyone knows that the more you owe the more credit worthy you are.

4

9.  Ignore the un-funded obligations of Medicare and Social Security.  Those people are a burden anyways.

?

10.  Ignore the Banks crashing around you.  The FDIC will never run out of money and neither will the banks with government connections.

banks are recapitalised (raising money + QE).

11.  Ignore the credit crises.  Money just gets in the way of running a good business.

?

12.  Ignore the worthless mortgage backed securities held by the banks.  We all know our houses will double in price next year to get us back to even.

they have to some extent been written down.

--------------------------

I could elaborate and be more balanced, but I just wanted to state some points.

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#6) On June 07, 2009 at 1:38 PM, portefeuille (99.50) wrote:

at the March 2009 low the S&P 500 index calculated in real EUR was down ca. 75% from its March 2000 high. it has gained ca. 27% in around 3 months since then. 2

There are 273% left to go (if the "average inflation" for the recovery period will be at 0%. If it is positive (and it would really be very strange if it would not be), there is more to go.) to be even with March 2000. 

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#7) On June 07, 2009 at 1:46 PM, Mary953 (73.06) wrote:

Buy FAS not FAZ because the banks are going to profit and prosper, and never ever falter. so you can hold it forever!

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#8) On June 07, 2009 at 2:23 PM, Mark910 (< 20) wrote:

Mary  ;)

GV; dude

Columbia; gotta try that

Port; honored that you took the time to answer, still looking at the links but if I wrapped it all together you are saying look at a much bigger picture.  Thanks 

step 9..tongue in cheek for Babyboomers will begin draining the system and add to the hole that is the US deficit

step 11..As the economy shrinks credit for businesses and individuals is harder to borrow thus we have a runaway cycle that feeds on itself. (Once again I was being facitouse.Of course money is needed in business)

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#9) On June 07, 2009 at 2:28 PM, portefeuille (99.50) wrote:

... , still looking at the links but if I wrapped it all together you are saying look at a much bigger picture.

that sums up part of it.

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#10) On June 07, 2009 at 2:38 PM, portefeuille (99.50) wrote:

at the March 2009 low the S&P 500 index calculated in real EUR was down ca. 75% from its March 2000 high. it has gained ca. 27% in around 3 months since then. 2

For the calculation see comment #34 here. chrisgraley told me today that I am using "way too many links", so I tried to use less of those.

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#11) On June 07, 2009 at 2:48 PM, portefeuille (99.50) wrote:

okay, another link:

 

chrisgraley told me today that I am using "way too many links", so I tried to use less of those.

chrisgraley told me today that I am using "way too many links" (see comment #10 here), so I tried to use less of those.

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#12) On June 07, 2009 at 3:33 PM, Mark910 (< 20) wrote:

Port; why Euros, the S&P is dollars.  If I look at it in Gold I get one answer but if I use Argentinian Pesos a totaly different answer.  Not saying your wrong just not sure I understand what your saying.  Maybe this: Adjust for Inflation and the correction has lasted 9years?

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#13) On June 07, 2009 at 3:36 PM, isusan (< 20) wrote:

Ok, Mark. It appears running & drinking aren't doing the trick. Time to explore alternatives to get you through this. Note that he warns that more than 11 minutes a day is just greedy...

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#14) On June 07, 2009 at 4:05 PM, portefeuille (99.50) wrote:

Port; why Euros, the S&P is dollars.  If I look at it in Gold I get one answer but if I use Argentinian Pesos a totaly different answer.  Not saying your wrong just not sure I understand what your saying.  Maybe this: Adjust for Inflation and the correction has lasted 9years?

The S&P 500 started its decline in March 2000 in real USD as well. The extent of that decline is just even more dramatic for investors that calculate in currencies that have appreciated versus the USD in the following years (and as we all known there are quite a few of those currencies).

100 EUR invested in short term euroland government bonds at the time of the stock market high of March 2000 (=: t1) would have been worth some 120 or 130 EUR (guessing ...) at the time of the stock market low of March 2009 (=: t2).

The buying power of those say 125 EUR would be close to the buying power of the 100 EUR in March 2003.

An investment of 100 EUR in an S&P 500 index tracker at t1 (with no currency hedge) would have been worth ca. 31 EUR at t2 and at that time would have had the buying power that 25 EUR had at t1.

So calculating everything in nominal EUR terms (representing the buying power of those investments for a "euroland" investor) the bond investment would have been flat and the U.S. equities investment would have been down 75%. And that might have looked just somewhat cheap.

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#36) On June 05, 2009 at 11:24 PM, Tastylunch (99.75) wrote:

portefeuille

Dude that's incredible! 75% drop!! And 10%+ differential between US and Euro demoniated. That's significant!

holy potatoes that could explain a lot lately, would be interesting to see a money flow and see if money really is flowing into US assets from europe.

--------------------------

(from here)

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#15) On June 07, 2009 at 6:33 PM, goldminingXpert (29.47) wrote:

I don't get why we're analyzing the stock market in Euros. The Euro rose 50% in value for no apparent reason over the past few years and then divebombed and is now making another futile rally. I fail to see how charting one volatile thing (s&P) along with a largely non-correlated (on a long-term scale) thing adds any clarity to the picture.

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#16) On June 07, 2009 at 6:40 PM, portefeuille (99.50) wrote:

I don't get why we're analyzing the stock market in Euros. The Euro rose 50% in value for no apparent reason over the past few years and then divebombed and is now making another futile rally. I fail to see how charting one volatile thing (s&P) along with a largely non-correlated (on a long-term scale) thing adds any clarity to the picture.

--------------------------

The S&P 500 started its decline in March 2000 in real USD as well. The extent of that decline is just even more dramatic for investors that calculate in currencies that have appreciated versus the USD in the following years (and as we all known there are quite a few of those currencies).

--------------------------

I was just making this point.

 

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#17) On June 07, 2009 at 6:51 PM, goldminingXpert (29.47) wrote:

Ah, alright. As long as you don't use EUR/USD to argue the US stock market is undervalued, I've got no gripe.

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#18) On June 07, 2009 at 7:46 PM, alexxlea (58.39) wrote:

Unemployment is not a good thing for our economy in its present form, and firms firing and not hiring is never a good thing in any economy. Banks are not properly capitalized, and many forms of firms and corporations would have folded had governments such as ours not started adding liquidity to the markets and backing the forced buys of assets (or buying them themselves).

What will get us out of this is a return to previous levels of stupidity, which we are currently on track to accomplish. Don't worry, we won't be able to pay our debts, the dollar won't be the major currency, and we'll have to default as a result. What you people don't understand is that the world has been slowly realizing that placing excess capital into denominations of our debt is an incredibly hard-headed idea.

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#19) On June 08, 2009 at 5:29 AM, AdirondackFund (< 20) wrote:

Yeah, you're right.  This really is alot funnier at 5:32 AM Monday morning June 8th with stocks crashing around the world and the S&P currently priced at 931 in the overnight futures market.   FAS my a$$.   

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#20) On June 08, 2009 at 7:30 AM, kaskoosek (61.54) wrote:

My rebuttal

 

Ignore Treasury yields.  The government will buy them and interest rates won’t continue to climb.

 

That could be true, fueling a currency crisis and thus makes holding equities much more attractive than holding dollars.

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#21) On June 08, 2009 at 7:41 AM, kaskoosek (61.54) wrote:

Port

 

"8.  Ignore the deficit.  Everyone knows that the more you owe the more credit worthy you are.

4"

 

Who said that 2004-2008 was a sustainable path anyway. Returning back to the debt level norms by replacing private with public is actually detrimental. The dollar devalued immensly to many other commodities and currencies including the ultimate currencies precious metals.

 

If that is not code red then I do not know what is.

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#22) On June 08, 2009 at 8:13 PM, bostoncelitcs (41.46) wrote:

My name is John Doe and I'm a BULL!!!

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#23) On June 08, 2009 at 11:07 PM, goldminingXpert (29.47) wrote:

Totally Dude!

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#24) On June 09, 2009 at 4:59 PM, binve (< 20) wrote:

Mark, another great post man! Couldn't agree more!!!. We will be getting an awesome short position in the next 1-2 weeks.

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