in early 1980 Grant topticked the gold bull market as he stood in line to buy Krugerrands north of $800. (to his credit, this story is only known because he told it himself.)
with this article i think he's got a good chance to toptick the current rally. there are virtually no bears left (besides Prechter, natch). Grant seems to be taking all his cues from ECRI, whose leading index is basically the SPX. the SPX has a huge rally, ECRI predicts a huge recovery, what a surprise.
from the article:
The world is positioned for disappointment.
i'm not sure how the sharpest rally in major indices since 1930 indicates the world is "positioned for disappointment". who cares what Bernanke or other bureaucrats say. money has discounted a huge recovery already, so it's not like you can go out and place bets on equities and have reasonable expectations for another big run to the upside. not to say a further rally couldn't occur, but i think it would be more like Nasdaq 1999 than SPX post the 1987 cr*sh.
(of course, people who lost half their money last year are praying for a further rally, but that is because they are desperate to get back to where they were two years ago, not because it is a low-risk trade.)
Gregor, i am with you on the debt thingy. people have so much debt relative to income and asset values that an incremental gain in income doesn't matter much.
Does Grant surprise you?
yes and no. i think his analysis is superficial and overly dependent on ECRI, which is surprising.
otoh, we've seen a lot of bears capitulate over the past few months, so it is kind of par for the course.
otooh, being a permabear is so fundamental to Grant's identity that it's a surprise. you would think this would be the moment where he'd press the theme, not give up. oh well, people change. we'll know for sure when the winter issue comes out with the cartoon. if it shows bulls skiing instead of bears on the ice rink, then we truly live in a changed world. |
