["We live in MOST INTERESTING TIMES when posters with the excellent records of you and Zeev differ so fundamentally on the market's future course."]
...George C;
They way I look at it; is that I (and many others here) whether lucky, or good; or a combination of both - hit the oilpatch cycle and then made the jump from "black" golds top - to "yellow" golds bottom & now caught a 50-70% move in the HUI (unhedged gold stocks) over the last 52 weeks...and also got another re-entry bite of late at the OSX 50's apple as well.
I/We have made significant returns over the last 2 years while most market indices are down 20-30-40%.
Because being a contrarian/cyclical trader has worked & worked well; I am in the capital & profit preservation mode.
$10 oil/OSX 45-55 and $250 gold/XAU 40-50 look/looked awfully cheap to me on all historic cyclical valuation metric's.... there was & is not any historic valuation precedence that makes DOW 9500, or even 8000 particularly attractive to me here ?
XAU 40 was the alltime low for Gold Stocks in Oct/Nov last fall. What's the downside here at XAU 54 ?
OSX 45-55 during the quadruple bottom of late 1998 to the turn in the spring of 1999 - carried the same downside risk...ie: nill - on any historic valuation metric, or on a cyclical basis.
DOW 8800 and even NAZ 1400-1700 do.
On any and ALL historic valuation metrics; this market is NOT cheap....not even close in fact.
So given the UNKOWN's that are unfolding allmost daily on a geopolitical basis, how anyone can be bullish; or have anything more than a toe dip, or a day/swing trade in long here (in other than defensive sectors) completely mystifies me ?
If ever in market history; we were shown signs to morph from growth/speculation to wealth/capital preservation... this is it !
1. We are STILL at historically high valuation multiples - we aren't even close to CHEAP yet..
2. We have off the chart geopolitical risk....and quite contrary to what Greenpimp said today; this market hasn't priced future terrorism acts/events into present prices; hell its obvious this market wasn't allowed to price anything in to it... it was propped up & plugged - period.
3. We have just had a historic wild card; I prefer to use the "Rogue Wave" term - just thrown into the market equation via bioterrorism....and there is no historic precedent in which to use to either chart our course, or to price in/discount "future events" !
4. We have collapsing corporate earnings.
5. We are in a King Dollar "catch-22" which nearly assures the manufacturing base of the USA will continue to erode.
6. We have a market infested with a poor quality of earnings / ie : pro forma BS etc.
7. We have a debt & credit quality crisis
8. We have a global currency crisis
9. We have the most tapped out & over-extended US consumer in history; who is now getting laid off in 10,000 employee cutback waves - who's last asset that hasn't been smacked by 25% to 40% - is his home that's now refi'd at 95% LTV atop a residential real estate boom/bubble.
10. We also now have the most "stabilized, intervened upon & propped up "Free Market" in history.
11. Only the US Dollar is keeping foreign investment in the US..... and only foreign investment is keeping the US market propped up.... and US Dollars are being debased by this Mad Hatter Fiat Free For All...to where one day soon; all the Kings horses & all the Kings men, won't be able to put the US market, or King Dollar back together again...
12. All the roads of history and of market lessons learned point in one direction here & it's the -
Yellow Brick Road ~
...that's my take
We have no fear, or respect of market history here.
History has a way of humbling every generation...and this one won't be any different.
Someday we just may be telling our grandchildren about the few, the proud & the "yellow" ....they of the new millenium who lived well & prospered thru yet another dark chapter in market history.... those "yellow" men of SI SD II (VBG)~ |
