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June 18, 2009 – Comments (13)

All these experts, all these opinions, all these varying views from the same information.

We have Jim Cramer who seems to be a momentum guy.  When things are going up he's bullish, when things are going down he's bearish.  His picks and rec's seem to be pretty short term oriented.  A traders mentality.

We have Doug Kass who has probably put up the best track record in this whole big shindig.  Bearish as can be - almost permabearish - and then flopped to bullish right at the bottom, now turning more bearish and wondering if his 1050 call for the S&P isn't getting less likely.

We have Larry Kudlow who seems like a perma bull (maybe the only one that I see here and there), who clearly dislikes Obama and tinges all his commentary with permabull and political slants. 

We have Deutsch Bank, who in general seem really bearish about the economy and things.

We have The Motley Fool who, when I first read their articles in December 2008, seemed to have a fairly normal and positive outlook on the market dip and the long term.  I remember reading things like "for all the painw e are feeling, there are some upsides, like stocks that are cheaper than we may ever see again" or "it may get worse, but not forever".  Over the course of the 7 months of reading TMF, its attidue seems to have turned bearish or even basherish in attitude.  I can't remember reading a positive TMF article in a while saying "stocks are cheap, bargains are out there" or antyhing like that.

We have the Yahoo Message boards.  Where 2/3 of the posts have no content more meaningful than "this POS is going down" or "breaking out soon".  Where TA posts with practically no detail are more common than posts containing any info about a company.  Where what almost certainly have to be paid bashers or pumpers abound, and where its not likely that 1 out of 10 threads will really have any useful information.  And where people who claim to be short a stock always pretend to know more than other people or have some secret information.  But, for all of that, those boards if you are willing to dig through them remain my SINGLE favorite and most informative resource for learning about a companies situation. 

We have seekingalpha whoh apparently lets anybody write and who favors bearishness as much as the CAPs blogs do, where praise for bears is the norm and where accosting bulls is also the norm, creating a sort of self-fueling bear culture.

We have the "Fast Money" gang that don't seem to think about stocks with a timeframe longer than a few days.

We have the very rare guy who seems to have a quiet level headed outlook about it all.  They always basically say "come what may, we crashed, its a good time to buy, eventually we'll make money, stop panicking".  I like those guys, in my experience wisdom is rarely loud and these guys are certainly drowned out by the rest of us yapping away.

We have Steve Leuthold who said at the market bottom in March that his Grizzly Short Fund was no longer useful as the money to be made in shorts was basically done, and who predicted an S&P 1100 some time this year.  He says stocks are cheap.  To his discredit he also said stocks were cheap starting last fall, and we wnet quite a bit lower then. 

We have more doom and gloom guys than its possible to keep track of and they all basically tout the same messages and they all basically seem to be on the same bandwagon and they like gold and they like this and they all konw we're going down.  I mean them no disrespect, but there are SO VERY MANY of them that its tough for any one to stand out.  Some notables include:

Roubini.  The man who's definiteloy getting rich off this recession.  He is, folks, a promoter.  For himself.  His brand is recession, so he has no choice but to preach doom and gloom.  If he flopped now and said "we're back to happy days" he'd probably lsoe alot of money.  The schools and other academic institutions that probably sign most of his paychecks tend, in my experience with academics and other non-doers, to like bearish thoughts better than happy ones. 

We have Faber, hwo predicts he is 100% sure that the US will have Zimbabwe like inflation, no question about it one day and then in some forum of market experts that my advisor read to me recently...  predicts that the S&P has bottomed, disaster is averted and offers he thinks the high for this year on the S&P could be as high as 1050, but no more, and if we get there soon he'd be bearish again.

We have Schiff.  Who is as doomish and gloomish as anybody, but apparently has lost pretty much all of his clients money by being wrong despite being a bear through the down phase of this crash. 

We have Kass and many others touting cash on teh sidelines as something that could build a floor under the market.  We have a guy on tonight saying that all the cash is in, there is no more, its all in, and thats proof that the market is going down, soon, and badly.  That was Charles Biderman.

We have Task at Tech Ticker, who seems to have interest only in very bearish almost cynical commentary.

We have the Zacks gang, who talks not much about fundamentals or charts, but about earnings revisions and expectation revisions.  Kind of interesting they are...

We have careers made off of one good call, or even off of just really really really promoting that you made one good call. 

And we have the CAPs blogs.  About as bearish as anywhere, where since I got here if you are very bearish you get many rec's.  If you are very bullish you are called an idiot as often as anything else.  That attidue has shifted a little in the last month, bulls can ocasionally speak without being accosted now.

We have the charting Technical Analysis guys who have some interesting things, who never really seem to insult or debate anybody, who definitely have a craft neither accepted nor rejected, but where everybody is sort of on the bubble.  I always just wonder what their long term results are.

The Bears tend to be more forceful, more emphatic, more certain, more condescending, more absolute in their comments, they KNOW.  The Bulls tend to say "historically" or "I haven't any idea if stocks will be higher or lower in one year", and other comments that really really tend not to be emphatic.  The Bears seem to hate being debated, and to want to be vocal much more. 

All these faces, al these voices, all these wildly varying opinions based on the same evidence. 

Probably for alot of people it boils down more to listening to themselves talk, being seen to promote their funds and services and so forth, making a name for themselves on seeking alpha or whatever. 

Maybe, my fine fellow fools, its people doing business - advertising themselves more than it is people trying to help or learn or discuss?

13 Comments – Post Your Own

#1) On June 18, 2009 at 11:30 PM, LongTermBull (93.61) wrote:

Man, I only recognized one name on that entire list and I can't stand him, lol.  I guess I just have a long term outlook and could care less what the "experts" think will happen tomorrow.

As for CAPS, yes the bears are loud but that doesn't bother me.  What bothers me are all these "predictions" that a) have a 50/50 chance of being right and b) are made over and over.  If you are going to make a prediction, man up and make a damn prediction.  Saying the market will do this or that every day for a month does not make you right if it does eventually happen.

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#2) On June 19, 2009 at 12:10 AM, anticitrade (99.67) wrote:

I like your segmentation.  When every "expert" is plugging their ears and shouting a different story the title "expert" loses some credability.  In my experience, the worse the product the more the salesman is going to have to push it on you.  No amount of capitilized words, explanation points, or outrageous claims are going to change reality.  I think people favor the bears argument partly because it is a lot cooler to talk doom and gloom than business as usual. 

On a side note, fine art sales were way down during the "Masters of the American West" show at the beginning of April (no big suprise there), HOWEVER in the "Prix de West" art show last week sales were excellent.  This indicates that a lot of BIG/smart money is starting to spend again.  

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#3) On June 19, 2009 at 12:26 AM, TMFUltraLong (99.95) wrote:

Id be curious what the ratio of outperform to underperform calls has been cumulative on CAPS since Jan 1st...hey TMFJake, you listening, lol

UltraLong

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#4) On June 19, 2009 at 12:36 AM, checklist34 (99.69) wrote:

longtermbull, my paragraph about the very rare guy who doesn't get wrapped up in it and seems to have a level head is partly for you.  :)

 

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#5) On June 19, 2009 at 12:43 AM, LongTermBull (93.61) wrote:

Haha, thanks, I take that as a compliment.

Have you seen this yet?  Unreal.

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#6) On June 19, 2009 at 12:52 AM, checklist34 (99.69) wrote:

anticitrade, thats interesting about the art show. 

on a similar sort of "side" thing, the stock discussions on various other (i..e., not stock related) message boards I visit tend to be focused on speculative biotech.  Biotech penny stock discussion galore, not alot of talk about going into the market or getting long or anything.  Whatever that means. 

some chap on CNBC today was opining that all the money is in, so there's nowehre left to go but down...  lol.  It seems likely that all the money isn't in, but I am curious about how much is left to come over.

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#7) On June 19, 2009 at 12:55 AM, checklist34 (99.69) wrote:

ultralong:  I'd guess that by far and away the majority of thumbs up / thumbs down are thumbs up.

buy a stock hope it goes up is something thats ingrained in everybody, but shorting is a bit counterintuitive.

I'd guess that enough votes are cast on caps that the ratio of longs to shorts on caps is pretty similar to the ratios of the market?

just thoughts

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#8) On June 19, 2009 at 1:37 AM, awallejr (85.48) wrote:

Check, this is what makes life "interesting."  What fun would it be if everyone agreed. I try to be a straight shooter.  I have no hidden agenda here.  I tell it like I see it.  I am a permabull. I admit that.  I think over time the market always will go up.  I think inflation is the reason.  We all remember hearing a grandfather/parent saying " I remember when I ONLY paid . . . ."

Short term, however, anything goes.

My portfolio is energy/dividend heavy.  I am really curious to see where it will be 5 years from now.  Short term I got derailed from profit taking, which I did warn about.  But I am holding them still just to see.  I want to see how many points I will accumulate when my stocks' basis keeps going down through dividends (am going to break the game once my stock's start price goes below 1 penny).

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#9) On June 19, 2009 at 2:12 AM, checklist34 (99.69) wrote:

an enormous advantage to buy and hold that nobody talks about is taxes.

...  when MGM and LVS and BYD all hit 12-14 bucks in may ... I'd never have bought them at that price, but if I sold them at that price (~3-4x my cost average) i'd have paid heinous income tax rates.  its TWENTY BLEEDING PERCENT LOWER to hold for a year, meaning if the stock doesn't move in a year you make 20%.

The tax fear combined with suddenly being way up on basically all of my ohldings has left me wondering WTF to do.

If you made 7.5%/year buying and holding (presumably this will be practically a given from the levels we've seen in this bear market, at least the lower ones).  Throw in 3% dividends and you have, after taxes, about 10%/year if you haven't sold.  In 10 years that would be about 2.5x your money.  If you then sold out, for a 150% profit, you'd pay about 20% (federal and state) at current rates.  So if you started with $1000 you'd have $2500 and you'd pay 300 bucks of taxes.  So you'd have 2200 bucks or a return of about 120%.

If you made even 12%/year trading stocks, but were taxed the max (we'll call it 40%) as you go, you'd make 7.2%/year.  You'd have to make about 15-17%/year to break even (as you're likely to collect far fewer dividends in trading than in holding).  Throw in transaction fees and you very well may wind up having to hit 20% to mach a 7-8% return from buy and hold.

Being in a low tax bracket would ease some of the pain from trading, but would not ease the fees part of the pain.

You have to do FAR better trading to match buy and hold, which is a fundamental limitation. 

The one place where I draw the line on buy and hold is this:  one should never hold a stock once it becomes overpriced.  Just dump that puppy and buy back on the next big market dip. 

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#10) On June 19, 2009 at 2:41 AM, LongTermBull (93.61) wrote:

Why didn't you just make this a new blog, lol?  Well put and deserving of it's own topic.

Here is a question for you based on just the little bit I know about your investment style and things I have read on CAPS.  If you know that taxes are a huge detriment to your return, and if you know that holding for over a year greatly reduces the taxes you pay, why are you going to exit if the S&P hits 1000?  

And if you know that buy and hold, or buy and hold as long as the stock is not overpriced, is an easier way to increase your money (as you illustrated) then why do you allow this to affect your quality of life?  One thing buy and hold allows is just that - once you buy you are simply holding and there is no need to watch Bloomberg or CNBC all day.  Just keep an eye on your companies from time to time for anything drastic and go about your daily life.  I don't want to sound like some lame cliche, but investing really should be for the rest of your life so no sense burning yourself out already.  

I feel confident you will not take this as criticism, just honest curiousity from me about your thoughts and maybe a little something for you to think about as well.

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#11) On June 19, 2009 at 2:33 PM, checklist34 (99.69) wrote:

hey LTB, ...  i hear you, and I'll think it over, and I often change my mind and all of that...  I wouldn't sell at 1100 if i wasn't in capital gains territory, i'd just use options to hedge I suppose. 

also, for me to be really happy buying and holding I'd need a higher dividend outlay than I have right now.  I have bought stocks that I thought had the greatest potential for appreciation over the next 1-5 years.  And I think that most (but nolonger all) of my picks still have room to run. 

I will always think it over anew each day...  and I should definitely start thinking more on a stock by stock basis than on a whole-market basis.  The markets move from 928 on may 8th to 926 this morning...  actually left stocks cheaper in my view.

Ther eare more bargains this morning than we had on may 8th...

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#12) On June 19, 2009 at 5:27 PM, LongTermBull (93.61) wrote:

Sounds like you answered your own question.  If you feel the stocks you own have more room to run then no reason to sell.  I don't think we are at the point yet that the market is too high, and I don't even think 1000 would be that point.  The S&P was at about 1500 both just prior to the tech bubble burst and prior to the current bear market.  Not saying it will get back there in the next bull market, but bull markets are measured in years not months.

 

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#13) On June 24, 2009 at 12:28 AM, checklist34 (99.69) wrote:

hey LTB, i'm going to pony up a buy and hold -vs- buy the crashes blog, and round it off with an after-taxes estimate of what the traders annual return would have to be to match up.  :)

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