Hi AC Flyer,
I must say that I do admire your tenacity when it comes to fortifying your market beliefs.
I suspect that you and I do not differ greatly in how we evaluate and "forecast" whatever directions the markets may decide to migrate. By nature, I'm a bull, a long term, buy-and-hold bull. I'm well aware that, on average, the markets tend to rise over time to the tune of about 9% to 11% per annum, so I tend to play the markets long, where the averages are in my favor (over time). For investments, I favor GAARP (growth at a reasonable price) and value plays. I disdain technical analysis (orange smoke and black magic to me), and strongly favor fundamental analysis for stock selection and eventual investments, though I will consult with my TA friends for their opinions when timing a buy and/or a sell. (Hey! Who am I to quibble with the TA folks over what they do. Whatever works is fine by me... <g>) I avoid shorting, options, foreign investments, etc. in order not to complicate my life and my taxes. During times of bear markets, I simply move into cash and cash equivalents to avoid extraordinary market risk.
Now having said all of the above, I remain very firmly in the bear camp for now. Their DD is usually much better than that of investors who are straight out bulls. And their evaluation of "statistics" and "facts" is also usually (but not always) much more in line with any realized outcomes. The timing of forecasts is almost always off, whether one is a bull or a bear, but bears appear to be more open-minded and therefore have more accuracy more often, from my observations.
Currently, I am very troubled by government statistics and data. I may be wrong, but to me, it seems as though lately the government has been releasing all of these numbers that somehow seem to get revised a month or two later. Over the past year or two, it seems as though all of the data revisions have been to the detriment of the bull perspective. Newspapers and magazines tout the original numbers in their headlines, but relegate the revisions to the inner pages of the publication. So, when you quote all of these new government statistics regarding the direction of the markets and the underlying economy, understand that I am highly skeptical of the data, to the point where I no longer believe it, and actually distrust the various agencies that release the numbers. I am really starting to believe that some well-meaning (yet misguided) group is indeed manipulating the US markets to the long side. Perhaps there is something after all to this so-called "plunge protection team". I don't know for sure, but my gut certainly tells me that something isn't going according to Hoyle. And since I don't know what that "something" is, I'm much better off unwinding all of my investments and migrating to cash, rather than trying to pick the few stocks that might do well in this environment. What I currently fear most is a general market sell-off, one where reason and logic are replaced with a sell-at-any-price emotion; in other words panic selling, which I think is a distinct possibility in the near term future.
I think that you might benefit somewhat by being a bit more skeptical of government data, and pay a little bit more attention to what is going on in the real world around you, wherever you may live. For myself, I take notice of decreased store traffic in the higher priced malls in my area, and increased traffic in discount retailers, such as Wal-Mart. I notice that the freight trains have far fewer cars to tow than they used to have. I no longer see as many freight trucks on the freeways as there used to be. And overall traffic is down on the roadways during rush hours, indicating fewer people commuting to work during the rush hours. The restaurants that I favor now have no wait times at all, whereas just a year ago, wait times of an hour or more were commonplace. FedEx and UPS trucks make far fewer visits to my neighborhood. Even my mail has far fewer advertisement circulars than was there even as recently as the beginning of this year. Everywhere I look, there are signs of a slowing economy, not an economy that is growing, or even merely treading water. Only two years ago, the economy around here was vibrant; growth was plainly visible; people were obviously moving upward in their standard of living. Circumstances have changed, and people are now satisfied merely to have a job, let alone expectant of raises and promotions.
So, my observations (admittedly anecdotal, and limited to the very small piece of geography that I can personally see) do not jive one iota with the government statistics and data. Someone or something isn't being totally honest and up front regarding the economy. So, I hope you will understand my extreme skepticism of whatever government data you may offer as support for a bullish economic outlook, and a corresponding rise in the stock markets. My problem is not with you or any other individual, but instead with a rosy outlook for the economy and stocks that does match what I can personally observe.
Good luck...
KJC |
