Different drivers, but similar motivations...
I've been engaging in "the sort" again, recently... posting finds on Aristocrats along with "views," again...
Still appears "wait for it" is prime focus with reason...
But, do see others are not waiting, currently, ... and see potential reasons for that... as "change" here / there.
Still think it necessary to consider "lessons" from prior efforts... as may re-apply in current instances...
And, in that... as, in, say SBSW peaking suddenly / unexpectedly... over $18 in April 21 and February 22... shorted hard in March 22 Note that prior sharp peaks in commodities and thus in the stocks... as it appeared first in "market stresses" and then in the "break out" in gold as it approached... as "commodities" generally... the answer to the "threat to banks control"... arrived in the form of banks withdrawing the funding support enabling commodities trading...
So... to prevent price rise (ie, "contain inflation")... "we just shot your trader in the head"...
The terrorist tactic... worked... to impose market full blown dysfunction... and to instill fear...
And, thus... commodities crashed, and have not recovered... inflation has not gone away... stock (indices) have not crashed, but stocks slid slowly off the bubble peak... which they now still hover nearer to than to "a bottom". Commodity investors got killed... as bankers accepted the traders submissive genuflecting...
Commodity Traders Gross Record $115 Billion In 2022 Profit Margin
Jim Rogers is not wrong. But, as (some) stocks have been sustained by more and more money printing... only now being done in secret... as last weeks "instant bubble" showed... others... have not been "so favored" by the "sudden retail enthusiasm" that doesn't exist... driving markets up ?
Failure modes thus remain unresolved... even as systemic risk continues to grow by leaps and bounds... while market function in "price discovery" is either entirely obstructed in occurring... or is imposed by simple thuggery... much depending (correct or not) on perception of "with us" or "against us" ? When markets are broken... predicting what "markets" will do... if it is not "as told"... when "as told" is often an unknown until after the fact... that should work... how ?
So, I think you step back... and "wait for it"... as part... But, also... shifting focus from "the trade" where dominated by lunatics directing targeted rug pulls vs "opponents"... to "the long term value"... makes sense... even as "long term value" has zero to do with optimal acquisition price vs time... given uncertainty ?
I think there is a clear test of limits in market rationality occurring... as "zombie companies" continue to exist... and nothing has begun work on or reduced either the fiscal or monetary insanity... or the impulse to "impose control" (as MOPE) on markets (and more) by officialdom and/or bankers in concert and shared self interest.
The one obvious contrary point... is that by denying / delaying inflation perception and reaction... by slow rolling the "control to prevent inflation" holding it in reverse... while MOPEing the messaging to delude people into thinking Jay Powell is Paul Volcker ? Sustaining inflation...as they have and are... while forcing the frogs in the pot to settle down and enjoy their bath... will work to solve the "math problem" in extant numerical disconnects... but... perhaps you are right in some aspects re "history vs math"... as, "that works" also imposes arriving at a solution... with a pot chock full of boiled frogs... which might not work out as intended.
But... MOPE is apparently failing... in a few market niches... and in "Jan 6" media control of (dis)information content / flow... as in other "misinformation control measures" ? Errors made in perception of boundaries that do not exist remains an issue... so many will not see those as related events... as I do.
But, if that is correct... and the plan is to "inflate our way out" while lying about the inflation as "we failed" vs "that's what we intended" ? Who is riding herd on the numbers in "Where we are" in that curve ?
Today, it appears that, even more after last weeks $1 Trillion "market boost"... and "retail buying the 2 year T's" we are perhaps reaching limits in capacity... whether in terms of money, or bull shit... unknown... but markets are suddenly wresting control back from the Fed... and forcing rates higher by not buying without having them. And, what's a hawk to do, then... other than lay an egg ? ZH on a roll:
Dear Fed, 'Speak Loudly Because Your Stick Isn't That Big Anymore'
What If There Are No Solutions ?
Is the Great Debt Crisis of Our Lifetimes Finally Going to Arrive?
Full circle back to those undesired moves in commodities... and the bankers terroristic responses... when that imposition of control in result was addressing a small and essentially defenseless market ?
Or, maybe... perspective on needing to understand what the problem is... before thinking there's no possible solution ? Hmmm. Didn't I mention that issue... yesterday ?
The problem that leaves me to address... is in the "metrics" of relevance in market analysis of "future value" of present or future earnings... Zombie's in the woods (as explorers raising $)... remain irrelevant in the consideration as anything but "dead wood" accumulated as awaiting the next seasonal outbreak of forest fires... in which they will contribute as accelerants.
VC Funds See "Mass Extinction Event" For Startups In 2023: "It Will Make The Financial Crisis Look Quaint"
Back to Ben Graham... and his views on lessons from 1929 ? The P/E is a discriminator... but... still quite fully dependent in utility on the persistence and quality of earnings. So, a "physics based" analysis of markets becomes critical now... as there are limits in possibility extant... and, more, as those in charge are "physics challenged" and not inherently capable of reason... or, avoiding the commission of "existential errors" ?
But, error in "physics" only in part... as "price vs cost" still more relevant in context of acting in ignorance... unless... they're truly totally ignorant about that too ?
Posted on that often in relation to energy... as the insanity of "green energy" tech that consumes more energy than it produces and also makes the situation worse by removing predictability in supply... In "green tech"... I have always made the case that it is now, and will be bogus... as political and about "forced transfers of value" rather than "better" anything... as will remain true as long as not competitive with carbon based energy on a COST BASIS... versus a "price" basis... where it may find rational niche uses, only.
Green energy... failing that understanding re "physics"... or, cost versus price... poses existential risks...
Tverberg: When The Economy Gets Squeezed By Too Little Energy
ZH, naturally, wants to be on both sides of the "complexity" issue ?
What Happens When Complexity Unravels?
Chevron CEO Warns That Premature Transition To Low-Carbon Would Be "Painful And Chaotic"
But, if you are ignorant... you don't care... and probably don't understand what "painful and chaotic" means in real terms that apply to real people... whether they understand, or not ?
Apply that analysis to gold... and, you get... no existential threats in result... (or, perhaps only in reverse as apply to bankers practices of monetary frauds) but, instead... get an (energy cost dependent) price floor:
The point of all that...
Is that a recent scan of stocks for PE... shows a lot of crazy bargains out there... Buffett et al saying "no value to buy"... but have continued buying Chevron and more Oxy... including this week ?
But, a PE depends... on sustaining the future price of the product or commodity sold...
If the market craters... and oil does again what it did in 2020... when it went negative ? What does that do to that PE you salivate over now ? Well... we're three years past that... and oil shares bought in mid 2020 have done pretty well... which doesn't mean a low number in the PE now... means they'll earn money in the future ?
But... while there is a PRACTICAL bottom line provided in "cost' and "physics"... it is also well proven now that "can't get there from here" is no obstacle to idiots...
So, consider that issue in oil, and gold... with a "cost based" bottom line... focused on companies growing cash... growing production... growing value... ? Where is the 'bottom line" ? How much do you discount the risk inherent in "crazies" going stupid ? Or, if they do... even while destroying a market in desperation while trying to defend themselves from "the end of MOPE"... and the manipulation of "fact" and opinion it requires ?
The other side of a crazy PE value... is that it may be crazy... as Ben Graham noted... only because people, as markets, are irrational... often disliking you, or your money... not because you are unlikable... but only because they are ignorant... or idiots ?
Those low PE values might be resolved by earnings failing to be sustained... and stocks falling farther...
Or, they might be resolved by... out of favor issues becoming future market darlings... with the prices of the stocks rising to account for their strong, and sustained earning power... whether their successfully investing in generating productive capacity... makes ignorant people unhappy, or not ?
And, from there... you have to make decisions... and, doing that... still have to engage in stock picking... ?
You might want to have a close look at... my recent posts on the Eureka Mining District... and events there...
Or, if the de-confliction re geopolitics is an issue... the resolution of my concerns re NFGC's apparently nonsensical structuring of exploration efforts... now explained ?
What's going on with... the market trends... recent events... and the PE... on IAUX ? |
