re: Hathaway's NG/Gold comparison & random musings...
JimL re: your comment of - "Sounds not too dissimilar to the oil patch back in '98."
... I think I heard that somewhere before (VBG).
It's not just a "similarity" - it's literally "Deja Vu - all over again" - period; same fundamentals & the same sentiment and opportunity.
Also; I want to say one thing to those who keep bringing up the "20 year Gold Bear Market etc" for the last time...
There were at least 4,5 major moves in the XAU during this time frame and more importantly - the longer & broader the downturn; the greater the eventual cyclical upturn ... that entire criticism/arguement is and should be sheer contrarian nirvana ~ to the ears of those investing in gold/silver stocks "here & now" ...and those using it as a criticism are literally missing the entire essence of the opportunity.
On another subject - James Cramer of The Street.com fame...
Cramer like all active traders sometimes get's into a zone - not unlike a hitter in baseball; who goes on a hitting streak - seeing the ball as if it was the size of a beach ball... literally going up to the plate knowing he's going to drive the ball & that's where Cramer's at concerning seeing the "secular vs. cyclical" meltdown in tech.
Love him, or hate him - he has very often nailed these market subsector-subcycles and in case no one has noticed - he's preaching "anti-tech" STILL at these levels - with religious zeal... his arguements are not just logical in a market surrounded by a sea of emotion; but he is also sharing some "inside baseball" commentary from top tech insiders and he is using the word "PANIC" and this just isn't a table pounding call - this is a "pulling the fire alarm & yelling FIRE" type of call - that is hard to ignore and should NOT be ignored.
All the psychobabble drivel/criticism of "I'd pay more attention to Cramer, if he had said this at NAZ 5000 etc" - is moronic... as that has nothing to do with his conversations & observations from Tech CEO's & Fund Managers and his "Fire Alarm/Exit" call... this is a classic emotional reaction/criticism & just endorses why the individual investor will NEVER get it - because they can NOT set aside emotional reactions to logical events...
So far; the only way to have played this bubble; is to honor everything that market history & market psychology and the madness of crowd behavior has taught us.
So far that mindset has been the only winner in this game & the final chapter dictated as such; is the "Capitulation/Washout" bottom - which must include massive volume, no rotation - just literal panic selling and be followed not by commentary, or sentiment about buying/trading the dip/bottom - but throwing in the towel and just walking away...with cash, not stocks as the final destination of the walking wounded.
Capitulation in sentiment is a prerequisite for a true bottom; not just capitulation of the tape...
Their hearts & minds must follow (the tape) as well & they will soon...
Risk has also been totally discounted in this "buy the dip" mentality and the recent still literally incredibly bullish sentiment numbers; indicate this is not anywhere near a bottom in tech imho.
I've said all along that Q1 reporting is going to bring more bad news and it will. There will be another pillar company (or 2, or 3, or 10...) blow up and the thoughts of a 2 quarter inventory workout will be blown out of the water as the acceptance of a secular and not just a cyclial shift becomes accepted.
Tech is STILL massively over-owned by the funds - they must continue to trim tech and there will be the traditional April liquidations/redemptions to pay income taxes and unfortunately; this is right into the face of Q1 Tech reporting and the Japanese Banks - "come to Jesus" - mark to market of their holdings in conjunction with their new accounting changes in the reform of the Japanese Banking System.
That confluence of negative events is "NOT a good thing"...
Also; traditional valuation metric's & multiples must & will be applied to tech - maybe even at a discount to the broad market - before tech has bottomed. This as well - is part of that "old world/market history" reality that is not yet accepted; but will be... soon, very soon.
Imho; through that April "Triple Witching - Bermuda-Triangle of RISK" - this is at best, an hour by hour, pure daytrading market in tech; where literally holding anything overnight is insane... and anyone thinking that this holds ANY risk vs reward attractiveness is a masochist, or a mainline-level gambling/trading junkie (VBG)...
The concept of RISK has been completely ignored in this market.
Investors & Traders are still in denial and as you pointed out Jim; per the schmarmy cheerleading of the likes of Kudlow going on Chris Matthews "Hardball" show on CNBC and talking about NAZ 10,000 etc is not just irresponsible; it's a "Tin Man/Used Cars-esque" last ditch effort to keep the "sheep" in the game just a little longer - as the "insiders" make their final exit and Cramer has acknowled this & truly is one of the few - trying to protect the little guy.
The "insiders" want out & completely out; as they see the same "Ghosts" that Greenspan did and the key to a final capitulation/implosion is that final mass exodus redemption run on mutual funds... and bet your ass, the farm & your 1st born - it's coming....and they want out before it hits.
Again.... JAPAN, JAPAN, JAPAN, JAPAN, JAPAN, JAPAN = MELTDOWN RISK.
Add in Q1 tech reporting, the still present rich valuations, April tax bill redemptions, Mid East unrest, The Foot & Mouth Outbreak in Europe etc... and why anyone see's this as anything other than a "Defense" environment escapes me...
FYI; I've got 35% Gold stocks, 25% Silver stocks (I really like silver on weakness & Buffet wasn't wrong on staying away from tech & he wasn't wrong on Silver either -just early), 5% puts on NG E&P's and 35% cash - not short anything other than those NG puts...
I'm using stops on my gold/silver & have sold/flipped golds into strength & bought Silvers on weakness & their lag of the gold move here of late - to a now near equal weighting.
As in all things; we shall know in the fullness of time...but; what's going on in Japan; could be something we'll all be talking about 10,20 years from now... the scary thing is - we might forget LongTerm Capital & the Russian Crisis by the time Japan gets done with the market... food for thought there people...
We'll can you say - "WHIPSAW" ?
... looks like the futures are indicating a little dose of reality coming at the open.... WHODATHUNKIT ?
Let the games begin ~ we're heading to MOABO...and the DOW is the 2nd shoe & it too; perhaps will enter the "Bear Zone"...soon, very soon... how close is the DOW to being 20% from it's high ?...think we'll get there ?
... tic-toc' |
