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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Rarebird who wrote (3194)	1/7/2022 9:31:47 PM
From: Sun Tzu	Read Replies (1) \| Respond to of 10593

>> You also spoke about a 1/3 chance of recession in February. That's not gonna happen in a month. Well, it was only a 1 in 3 chances, so you should not be surprised that it didn't happen. However, in the interim the bond market assigned a high enough probability to it to flatten the yield curve and at times even outright rally. You could have made a mint off of that. >> I'm not even sure at this point how all this info would've helped my portfolio rise more than the one percent it rose this past week. Not for the week. But I did call the actual high of NDX exactly as it happened and dumped almost all my stocks within 2 hrs of the NDX top. Furthermore, there were several elements of that prediction that would have made a ton of money. Among them shorting the dry bulk futures and switching to defensive sectors such as real estate and consumer staples. >> The stock market fell this week because the Fed is on the war path to raise rates and reduce liquidity ( i.e; its balance sheet). I've said countless times that the stock market will challenge the Fed's Hawkishness by declining 15-20%. And I expect the Fed to back off at that point and put up with higher inflation to prevent a recession and possible Armageddon. What worries the market more than the interest rates is the talk of the balance sheet and liquidity drain. Regardless, I agree with you about the Fed backing down mostly because the interest rates cannot rise too much or the government debt payments will go too high. Secondly because in absolute terms the economy is not as strong as it should be. And finally because the inflation rate will peak by April, removing the urgency for the Fed to raise the rates. NDX should at least go down to last October levels. Value stocks, industrials, residential and medical REITs, and miners should do better than the market for at least the next few months and perhaps the year. Services should become a buy in the spring. The current dogs, including China, tech, and bonds, may prove to be great buys within 6 months if they fall as low as you think they will.

To: Rarebird who wrote (3194)	6/18/2022 9:10:16 AM
From: Sun Tzu	Read Replies (2) \| Respond to of 10593

We need to revisit this story. The sell off started in January instead of February, so I was wrong by a month (give or take). Now we need to look for when the bottom will be reached. I can see a scenario where the corp guidance is positive or the earnings hit is not as bad as priced in and we can see rebound this summer. Or a worst case scenario of hitting the bottom in Q4 (more likely in late September timeframe). I am not looking at individual stocks this weekend, but I am going to spend some time doing fundamental analysis on the market as a whole. Here is a fun thought experiment - you and 99 other people are asked to pick a random number between 1 - 100. The winner is the person who picks a number 20% below the average number picked by everyone. How will this game go? What number will you pick? That is the kind of calculation that I will do this weekend.