Mace - 09 February 2010 10:28 AM

I’m a contrarian.  Everybody is a contrarian nowadays.

How do you reconcile those two? Are you a mainstream maverick against all the contrarian sheep?

Reminds me of Tommy Lasorda’s “Nobody goes there anymore because it’s too crowded.”

deagol - 09 February 2010 11:01 AM

Reminds me of Tommy Lasorda’s “Nobody goes there anymore because it’s too crowded.”

That was Yogi Berra. 

deagol - 09 February 2010 11:01 AM

Mace - 09 February 2010 10:28 AM

I’m a contrarian.  Everybody is a contrarian nowadays.

How do you reconcile those two? Are you a mainstream maverick against all the contrarian sheep?

Reminds me of Tommy Lasorda’s “Nobody goes there anymore because it’s too crowded.”

Just being sarcastic.  My take of the stock market is choppy and downward bias over the next few years.  This really pissed me off since AAPL would not be able to reach those lofty price targets for a bull market.  I hope I’m wrong.

Btw, I’m not a basketball or baseball or football fans, don’t like sports.  Also don’t know American, European and Egyptian histories.  Every time you guys quote those, I’ve to google the web.

deagol - 09 February 2010 11:01 AM

Mace - 09 February 2010 10:28 AM

I’m a contrarian.  Everybody is a contrarian nowadays.

How do you reconcile those two? Are you a mainstream maverick against all the contrarian sheep?

Reminds me of Tommy Lasorda’s “Nobody goes there anymore because it’s too crowded.”

I only say that a lot of people are bearish from reading a lot of blogs by people who trade the /ES. Most are EW wonks and all are talking about Primary 3—a big down leg. In the meantime I look at weekly MoneyFlowIndex and it is as low as it was near the two notable bottoms of Feb 08 and Feb 09. And while I think of it, what month are we in now? Would it also be Feb?

incorrigible - 09 February 2010 11:48 AM

deagol - 09 February 2010 11:01 AM

Reminds me of Tommy Lasorda’s “Nobody goes there anymore because it’s too crowded.”

That was Yogi Berra. 

I really didn’t say everything I said.

Mace - 08 February 2010 10:57 PM

Lord Fawkward,

Have been pondering over what u have said.  Robert Prechter thinks US economy would be in deflation till max 2014.  He might be underestimating the length.  Evidence indicates that it could last till 2023 .  The pop from 2014 to 2017 is a multi-year sucker rally, if I may use the term.  2007 is the start of a multi-decade decline.  Well, AAPL would not be in multi-decade decline but would be affected unfavorably.  Those who expect stratospheric P/E for AAPL would be disappointed.  P/E (fwd) of 15-20 would be reasonable.

capablanca, mbeauch, artman, DT, TanToday, Deagol and other fellow Americans,

What do you think?

Mace, you have again spraked a good discussion.  I think it is important when thinking about tops/bottoms, rallies/crashes, ups/downs to separate the economy from the markets and to be clear upon which we are discoursing.  We do a pretty good job of that on AFB as a rule. 

However, we must also avoid conflating deflation/inflation with recession/boom.  It is possible to have inflation and recession simultaneously.  It is possible to have a strong economy and deflation simultaneously.

It is also useful to be clear about the meaning of the words inflation and deflation.  In the jargon of the popular press, inflation means higher prices (and/or wages); deflation means lower prices.  In economics the definition of inflation is the devaluation of fiat currency (or currencies).  It is the latter definition which I use.

There is little doubt that many developed-nation governments are devaluing their fiat currencies.  Inflation is real and significant in Euro-land, the U.S.A, the U.K., and Japan.  Prices are not now rising in these countries because of excess capacity, low velocity of money, high unemployment, and high consumer debt.

I am not bullish on the market or the economy.  I am not bullish on the Dollar, Euro, Pound, or Yen.  My equity investments are in Apple and companies that both have hard assets and are denominated in strong currencies (Real, AUD, CDN).  My debt investments are in Norway, Australia, Singapore, and Canada.

I would not short the market right now (except to hedge), because of the flood of liquidity being generated by Washington.  I also don’t want to stand in front of the Plunge Protection Team (if it exists).

As for Precter specifically, I really don’t know that much about him.  If memory serves, some of his bold predictions have been right and some wrong.  That he is willing to take a contrary view is to his credit.  A couple of others who see long term trouble and have credibility with me are Marc Faber and Peter Schiff.

capablanca - 09 February 2010 05:59 PM

... My equity investments are in Apple and companies that both have hard assets and are denominated in strong currencies (Real, AUD, CDN).  My debt investments are in Norway, Australia, Singapore, and Canada ...

Could you refresh on what these investments are?  Charts of natural resources and agricultural stocks are bearish too e.g. OXY, GG, BHP and POT.

capablanca - 09 February 2010 05:59 PM

... In economics the definition of inflation is the devaluation of fiat currency (or currencies) ...

Devaluate vs other currencies or decline relative to gold or ?  Using this definition, we’re already in hyperinflation .  Using the definition of higher prices, we’re in hyperinflation for decades e.g. a single family house has gone from $10,000 in 1970 to $1,000,000 in 2010.

Mace - 09 February 2010 06:30 PM

Could you refresh on what these investments are?  Charts of natural resources and agricultural stocks are bearish too e.g. OXY, GG, BHP and POT.

I have been into BHP (AUD) and OXY (USD) for years and continue to hold.  BHP’s chart may be bad, but their iron ore prices are good and as of yesterday getting better.  OXY is the best managed large U.S. independent oil company and have only 6-7% exposure to refining.

Since my XTO was bought by Exxon, I have replaced it with ECA (CDN dollar) and WOPEY (AUD).  My Grant Prideco was bought by NOV, and I replaced only part of it with SLB.

I have PBR (Real), SU (CDN) and STO (NOK).  Also in Brazil I have VALE (Real).

In the U.S. I still hold half of my HP (USD) position.  If Washington ever comes to its senses, this company will double.  So I sold half to get my basis out, but stubbornly hang on to the rest.

To put this in perspective, all of these investments together add up to less than the value of my AAPL holding.