Wednesday, November 27, 2013
The chart shows a bubble. Why does everyone deny it? (It's not what you think)
There's been a lot of talk in the goldbuggersphere about a bubble. In their case, of course, they mean a bubble in the US broad stock market.
Here. Let me show you a classic bubble-pop chart, okay?
That's the QQQ ETF from start of 1999 (inception) thru 2003.
OK, you can argue that the tech bubble began before 1999. But if you use EDIG (which was an utterly worthless stock with no assets, that only went up because its name was "eDigital") as an indicator of the stupidity, that one only took off in April 2009. So you can say that valuations got silly by 1999.
So anyway, that's a bubble chart. Agreed? Of course.
Now compare the Q chart above to this one below:
Wow! That looks like quite a similar chart, eh? It started going parabolic in 2010, hit a pretty well-defined peak, dropped a bit and tried to recover in 2011 (the way QQQ did in summer 2000), then continued an abject collapse.
That's one hell of a bubble, no? It went up over 4x, then collapsed right back down by something nuts like 85 percent! Ouch!
Boy, you'd have to have been a real dumb fucking clown to have invested in that chart, eh? I mean, sure, it makes sense to buy it on the way up like any good follow-the-herd momo - but why the hell would you want to own this after summer 2011?
That's a bubble chart, ain't it?
Only dumb people invest in bubbles, right? Momos buy it on the way up, following the sheep; and muppets hold it all the way down, denying that their portfolio is full of worthless shit as it trends to zero.
Therefore you shouldn't buy the S&P 500 right now, right? Ain't that what the goldbugs are saying?
That chart, above, is a chart of a portfolio of 25 junior mining stocks, bought four years ago in 2009 and held til today. Here, let me show you the contents of this portfolio:
(You can see I've tried to pick stocks across the spectrum, not just crap. So there's a few stocks in here from each of your favourite stock analysts. I tried to pick the most popular stocks, though: the point of this chart is to chart the stocks that the junior gold market truly thought had value.)
Now what sort of unmitigated fucking pig-ignorant arrogance could possibly exist that would drive a newsletter writer, blogger or "stock analyst" to call the S&P 500's chart today a "bubble"?
These hard-money, Mises-worshipping, Bernanke-hating, Zerohedge-quoting, fiat-Weimar-Zimbabwe goldbugs were hyping a junior mining bubble in 2009 and 2010; they were good momos all through 2010, joining all the other "unthinking sheep" in riding an upward wave on gold stocks that, in the most part, had utterly zero value; they were still buying in early 2011; and they've mostly been suckers enough to continue pumping this exploded bubble all the way down to the bottom.
Before you listen to a half-assed critique of the US broad market by some clown with a blog and a newsletter, ask yourself: what stocks was he promoting in 2010 and 2011? Tesla? 3-D? Google? Ford Motor Co., for fuck's sake?
Or was he fucking you in the ass with Kaminak Gold?
If the fucktard didn't recognize that the junior miner scene was a bubble back in 2010, or after it popped in 2011, then he sure as hell has no clue about the broad US market today. Tell him to shut the fuck up with his ignorant opinion.
In fact, forward him a link to this post. I want the ad money.