Down goes the Dow

K5 detector wrote:

Please do not engage K5. He likes to hijack the thread in order to spread his hate. Do not fall for his tricks or you may become a loser like him.

My bad. Don't feed the troll. I get it.

Are we headed for another recession?

http://fivethirtyeight.com/features/are-we-headed-for-another-recession/

Big Dog,

Interestingly John Hussman's weekly commentary addresses possibility of recession. An Immenent Likelyhood of Recession:

http://www.hussmanfunds.com/wmc/wmc160118.htm

Igy

He's been saying the same thing since 2009. Eventually he'll be right.

Big,

He has been more right than anyone lately, and that is the point. More from another source:

https://confoundedinterest.wordpress.com/2016/01/15/us-q4-gdp-forecast-falls-to-0-6-atlanta-fed-gdp-tracker/

Igy

Big,

And another source:

http://www.acting-man.com/?p=42642

Igy

I may have missed it among all of the Greek and Jesus rhetoric, but I did not get a good feel for what Hussman means by "imminent". If he means this year, I would respectfully disagree.

I do appreciate his admission of being wrong on his last recession call.

Big,

I guess that's what makes a market. Leading indicators are weakening which is a fact and not a matter of opinion. Is that enough to predict a recession that becomes a matter of opinion. One thing is for sure the bullish market view has been wrong for awhile now.

Igy

Big,

You may want to renew your reading glass prescription if you have one. The reference to Greek philosophy and Jesus was a reprint of an MLK speech from 1957. By the way January 18th is MLK Day.

Igy

This morning the People's Republic of China is again Red China. At least as far as the stock market goes.

You tell me nothing I did not already know.

Big,

OK, but do you listen?

Igy

Ghost of Igloi wrote:

coach d,

It is discouraging to me as a financial professional how blind the industry is to the coming storm. I hear the excuses for market behavior which for the most part ignore the obvious. If I am right this will be the third time in fifteen years the collective wisdom of Wall Street's most respected analysts have been very very wrong.

Igy

What you're saying is not accurate. If you do a search on financial threads on this site for the fall of 2007, you will see arguments I had with Flagpole at the time when I pointed out that private bankers (in particular Bank of America and Wells Fargo) were telling their (wealthy) clients to move assets from stocks to bonds. You don't get this kind of thing from mutual funds, but private bankers did call the market situation and raise red flags. What happened is one of many reasons why I strongly disrespect the whole mutual fund industry.

Regarding Goldman, I can site some examples of them being right and much of the market being wrong because I follow their research (that does not mean that I don't want their management from 2008 to go to jail):

(1) They called the gold top in 2011 at 1950 as I recall, and it was dead on.

(2) In their outlook in Jan, 2015, they correctly called that Europe would likely escape recession/deflation. They called it a deflation risk rather than fact, when the vast majority was saying that the EU was going down.

(3) Last summer, they had a research article called "The new oil order" where they projected $20 oil by the end of the year. That is really what got me going on shorting industrial commodities in general. They seemed a bit out there last summer, but they were right.

By comparison, Hussman's Strategic Growth Fund is presently down 29% since the market bottom in March, 2009. I cannot understand why anyone claiming to be a market profession would keep promoting absolute garbage like that. He is one of the worst investment managers in existence.

Also, I have pointed out a number of times that I pulled out early in 1998-2000 because Warren Buffett had said in his 1998 Annual Report that he had stopped buying stocks at all because he could not find anything worth buying. I don't pull out early any more and left a lot of chips on the table because I did pull out early, but he did call it.

What's different now is that the private bankers and institutional investors are not telling people to pull out, although institutions and moving some money into CTAs and real estate advisers. Buffett in fact has said that this isn't a bubble.

Here's DJIA vs Berkshire Hathaway from Jan 200 onward.

BH shares did OK in the early 2000s relative to the Dow. They were not, however, immune to the 2008 financial crisis, and also started to dive ahead of the Dow around the end of 2014.

Believe me, I try to search for negatives as to why Ford would go down. And there are some. One is the idea that Tesla, Alphabet, and Apple may be the future value of the auto industry and that Ford will be relegated to strictly low margin manufacturing of vehicles. I only partially buy that argument. But its nice to own some Tesla to cover that risk to my Ford and GM stock. I also own the XLK, the technology portion of the S&P. So now I feel like I'm diversely invested in whatever direction the auto industry goes. Unless foreign automakers start dominating the industry. Interesting news about Fiat. They are being sued by a couple dealerships for basically channel stuffing. If there is any merit to it than it could turn into another serious auto scandal.

Bigollo wrote:

Ford defies logic. Good news and it drops. Bad news and it drops. No news and it drops. Why does everyone hate Ford.

All: Thoughts on SUNE, FCX, LINE.

The bull lives?

http://www.cnbc.com/2016/01/14/2016-rout-not-end-of-stock-bull-market-tom-lee.html

coach d,

You go with Goldman I will go with Hussman and we can compare notes this time next year. I think you discount Hussman a liitle too much while giving Goldman more credit than deserved. Hussman's view is in the lead at this point.

Igy

John Hussman, 4/27/2015 "Fair Value on the S&P 500 Has Three Digits":

"The knee-jerk reaction to our valuation concerns is to substitute any consideration of historical evidence itself with a criticism of me, personally. Although this strategy overlooks some remarkably useful lessons that can be drawn from our experience in the recent half cycle, it won’t bother me if that’s what one needs to relieve the cognitive dissonance created by inconvenient historical evidence. As in 2000-2002 and 2007-2009, every share of stock outstanding will have to be held by someone during the downward completion of this cycle. Many speculators have volunteered to take one for the team (with margin debt hitting a record high last month, they’re in crowded company), and I understand why they don’t want to hear about downside risk."

"As for making things personal, criticizing others has no bite when they’ve already admitted their stumbles, and especially when they’ve addressed them. So, as usual, I’ll follow the above with a full recognition of the points where I’ve been most incorrect (at least a while) in the past three decades. None of this is new to those who follow our work, but that kind of balance is always appropriate, and it may help to avoid the mistake of shrugging off current extremes."