Down goes the Dow

Maybe. Buffett was pretty negative on the near future, it sounds. A world where interest rates 4-5% is a different world.

More of a normal world than zero interest rates.

Prediction check

A year ago, as markets started to fall, investors tried to buy the dip with ARKK and that kind of stock. A year later we can safely say that was stupid. ARKK went far lower and is still down 22% from that moment a year ago.

The wisdom of crowds is often wrong and buying the dips is not always a good strategy. And be careful not to fight the last war...wishing you hadn't missed out on crypto in covid times is no excuse to back up the truck after it fell 20% in early 2022. It had a long way more to go.

Ben Johnson, CFA
@MstarBenJohnson
$ARKK pulled in nearly $400 million in flows Mon.-Thurs. this week.
Thursday's haul was $334 million.
The fund's YTD flows total now stands at $1.3 Bil.
The fund's YTD return is -52%.

May 6, 2022

Amazing that Buffet/Berkshire receives so much in dividends (like $7 billion or so) from just a few stocks.

Prediction check

12/22 this poster with a massive following (750k followers!) predicted a crash, thinking the FTX saga and fall in lumber prices were sure signs of not just a fall in stock prices, but a crash!

Actually not a bad short term call.

12/2/22 when he made the call: SPX 4071

12/22/22 SPX got down to 3764, or around an 8% fall in 3 weeks. Not a crash, but almost, and in any case a fast hard decline.

But then over the next month, the market got that 8% back and more.

I'll give this an above-average rating.

David Kelly of JPM is my favorite analyst...he's not all fireworks and predictions like some, but he's comprehensive and has his feet on the ground, humbly. He goes through the numbers and his views are generally more accurate than false.

Here as inflation soared in 2022 he said 'eh the inflation is peaking...we'll have an economic slowdown to 2% real but probably no recession. And it was a perfect call.

linkedin.com

Slowing Growth and the Potential for an Extended Soft Landing

Subscribe to the Notes on the Week Ahead newsletter to receive it directly in your inbox. In the movies, in order to convey the passage of time, a director will sometimes film a scene as the seasons quickly pass before your e...

Link:www.linkedin.com/pulse/slowing-growth-...

All eight indexes on our world watch list posted gains through May 8, 2023. France's CAC 40 finished in the top spot with a YTD gain of 14.94%. Germany's DAXK finished second with a YTD gain of 12.07%, and Tokyo's Nikkei 225 finished in the third spot with a YTD gain of 10.94%.

Big slam-down in the Fed's inflation now-cast after today's CPI.

Headline inflation estimates for the Q2 came down 50-70 bps. PCE inflation is only at 2.7% now, per the Fed. That's a very low number.

Great news.

My understanding is that housing has nosed over finally and the summer and fall numbers should finally show that shelter costs are no longer inflating.

But used freaking cars keep going up.

Anyway, inflation continues to cool for headline numbers. If the US gummint can just not blow up the world economy in the next few weeks we should be good. Even Sp500 earnings ests are starting to rise again.

note: Inflation at the core levels is stickier. Not sure how to interpret that yet.

Prediction Check

Hedge funds apparently put on the shorts a month ago and reduced their exposure to tech as earnings season got underway.

And that was the wrong thing to do. It was another good earnings season.

SP500 has risen around a percent since 4/10, tech around 2%.

Holger Zschaepitz
@Schuldensuehner
Hedge Funds boost S&P shorts to decade high before CPI, earnings. Net short positions at levels not seen since 2011. Goldman’s clients cut tech longs at fastest pace in 15 months.

4/10/23

Hope no one here had a lot of money invested in Peleton. It was riding high just 2 and a half years ago at $151 and is now at $6. OUCH!!!

No one cares.

Where is ghost of igloi??

Prediction check.

4/11/2023 this widely followed forecaster (this tweet got 250k views) said we were at the highest ever likelihood of a bear market.

Instead the SP500 climbed about a percent.

That's a fail. Although no prediction was made - just a likelihood reported.

Game of Trades
@GameofTrades_
Bear market probability is at its highest level. EVER.

Game of Trades
@GameofTrades_
·
Apr 11
The model uses 5 macro inputs:
1) Unemployment rate
2) ISM manufacturing index
3) Yield curve
4) Inflation rate
5) PE ratio

No one cares.

Earnings Scorecard: For Q1 2023 (with 92% of S&P 500 companies reporting actual results), 78% of S&P 500 companies has reported a positive EPS surprise and 75% of S&P 500 companies have reported a positive revenue surprise.

Prediction Report

a month ago this doomcaster (56k views) said traders had loaded up on calls and that was a good sign the market was in for a downturn.

yeah nah. SP500 flat since then.

I love the first comment to the tweet. Using epic language. 'carnage' and 'shall' to show the size of the decline. People really really think the market has a comeuppance due. I mean they always think that. Fixed mind-set.

Game of Trades
@GameofTrades_
Equity put/call ratio is signaling that investors have loaded up on calls
Current levels have timed market declines throughout the ongoing bear market

Yeah, I love the saying: markets climb a wall of worry.

Another solid day of gains, all three of the major indices up.

Was looking at small caps today and it sure seems like they are overdue for a rebound. What's with that? I might nibble there if I wasn't already in there a tad bit.

This debt ceiling thing - is that every going to get resolved?

Wonder how's Igy doing?

Inverse Cramer ETF is underway. SJIM.

1 month

Inverse Jim -2.18%

SP500 +0.13%

on small caps...oh man they cratered. I suppose with a long enough horizon it's a good time to put money there. What's that saying? When you really have to hold your nose when making an investment that's probably a good time to do it.

I'm structurally heavy on small caps and light on foreign stocks. So I'm having a rubbish year.

I think Igy has walked away, after all these years. OG let'srunner.