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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: orkrious who wrote (81967)	5/19/2007 8:41:20 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 110194

on sentiment theory... that's his best case ever, IMO. he's on a new plane at this point.

To: orkrious who wrote (81967)	5/22/2007 9:35:35 PM
From: Wyätt Gwyön	Respond to of 110194

exalted cash-to-assets ratio of 3.6% (most recent data) - which is 0.6% less than at the 2000 Nasdaq mania high. i think there are plenty of sentiment indicators which show over-the-top bullishness, but mufu cash ratio is not one i put much credence in. i believe there is a secular shift towards full investment by mufus, and that stands to reason: equity mufus have no business holding cash. they are already charging a point and change to underperform the market; what business do they have trying to be timers on top of that? equity mutual funds should be invested in equities, as close to 100% as is logistically feasible. investors IN equity mufus should only have a portion of their assets in them. if investors want to hold cash, they don't need to pay a point and a half to their mufu mangler for the privilege. intelligent mufus, which is to say the passive and index fund famblies like DFA, are run at very close to 100% equity investment at all times. anything less is a disservice to their customers. investing in these funds requires an RIA, who will generally advise the client, first and foremost, to maintain some stability in cash, Treasurys or Agencys of some ilk and maturity. needless to say, investors in a basket of DFA funds have had much better returns than your typical active mangler who tries to time the market. indicators of bullishness that seem more relevant to me are things like the private equity bubble, the China retail stock bubble, etc. i did like Heinz' mention of the increase in leverage at GS.

To: orkrious who wrote (81967)	5/23/2007 12:45:47 AM
From: Wyätt Gwyön	Read Replies (3) \| Respond to of 110194

if one considers the fundamentals that ARE actually of importance to gold...one can not explain the 1980-2000 bear market. it's impossible, since the period 1980-2000 has seen more debt creation i think it's quite easy to explain: gold was in a bubble in the 1970s, so what happened to gold from 1980 to 2000 was a reaction to the previous bubble, just as what will happen in US housing going forward is a reaction to the bubble that has recently popped in housing. one could say the gold bubble of the 1970s anticipated future monetary debauchment and then some, just as one could say the subsequent gold pummeling anticipated and discounted future disinflation and then some. assets are rarely valued correctly, and then only by chance. still, fundamental values can be shown as regressions over a very long time period. most of the time assets are overvalued or undervalued relative to their long-term trend. even though i'm not a goldbug i do think gold theoretically has a fundamental value, but one can only determine it over very long time periods which are not practical to people whose investment horizons are less than half a century. even deducing the "fundamental" value of gold may only tell you a point it will regress to in the next 30 years. before that happens, it might go in an undesirable direction.