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Tuesday, December 24, 2013

Michael Shaoul on BNN


He's locked down his blog but he can't stop me posting links to his interviews!

Here's a link to Michael Shaoul on BNN.

He's very bullish the US, go listen to his opinions.

One thing he points out, on the topic of multiple expansion and directed precisely at Jordan Roy-Byrne and other unbelievers, is that just recently the UST30Y was trading at a 2.5% yield, the equivalent of a P/E of 40. So the US equities' P/E right now is nothing to be concerned about; people simply haven't allocated sufficiently into equities, and as the reallocation continues, the market will get richer. People just disbelieve it because they were so traumatized by the last crash that they're still thinking in crash-protection mode.

He doesn't say anything about Rosenberg's capital expansion and productivity increases.

He thinks the big mid-cycle risk is interest rates going up faster than the Fed wants, because it's still too far behind the economic curve. Then again, I don't recall Shaoul being invited to join the FOMC.

He notes the global growth picture is exciting; you haven't had Europe, Japan and the US all growing at the same time since 1987. Which is nice, since that year was the start of 13 years of a fantastic US stock market.

9 comments:

  1. http://www.businessinsider.com/liz-ann-sonders-market-snapshot-2013-12?op=1

    That chart shows Shaoul is a doofus. And its a year old too. By now, people are 40% allocated to stocks which is one of the highest ever. Its higher than every year but the late 90s and early 2000s. The bottoms were below 20% in the 1980s and 15% in the early to mid 40s (I looked at other charts).

    And that PE argument is totally fucktarded. The PE could go to 40? Its never gone above 40 except during a bubble bust bear market. All major market tops came in at 23-26 pe and 2000 was 34. Last time rates were really low was in the 30s and 40s and the PE didn't rise above 20 after the bubble bust. And now rates are going up, so by that logic the PE should decline?

    US stocks might have a bit more upside but are a terrible investment for the next 2-3 years. Most of the bullish arguments posted by this blogger can be quickly debunked as I just did here.



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    Replies
    1. "US stocks might have a bit more upside but are a terrible investment for the next 2-3 years." I'll hold you to that! We'll see what the next 2-3 years bring.

      As for your link... did you happen to read Liz Ann Sonders? Have you been following her for the last few months? And did you happen to see the title of that BI article, or look at all the rest of the data provided?

      Shaoul isn't a blogger, btw... he runs a wealth management company with $10B in AUM, and at some point someone seems to have awarded him a Ph.D. in Accounting & Finance. You?

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    2. Oh, and from September 2012:

      http://myownmarketnarrative.blogspot.ca/2012/09/toronto-resource-investment-conference_29.html

      "He presented his thesis that the PM equities put in a major bottom this spring, per the Rydex PM assets chart, and per the spec silver positions having hit an 11-year low, and per the senior producers' valuations having dropped to a 6x/7x cash flow.

      [...]
      "He's got a near-term target of $2350 for gold, maybe by end of winter (I think that fits best with the whole "sell at PDAC" thing, personally); his mid-term target is $4000 WTF, and then after a correction he thinks there'll be a parabolic move to something like $7000-$8000 OMG WTF LOL BRB STFU."

      How's that working out?

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    3. And from Nov 2012:

      http://thedailygold.com/gold-stocks-approaching-a-crossroads/

      "The market is at an interesting crossroads. Financial results have been strong but valuations are weak. The market believes earnings and cash flow will decline and has priced in that outcome to some degree. Ultimately, this will resolve itself in one of two ways. Producer margins can decline which would impact cash flows and profitability. That would eventually lead to lower share prices and GDX could threaten a break below 40. On the other hand, should margins increase then share prices will explode higher from a compounding effect. Rising margins will generate stronger cash flow and higher profits and the low valuations will rebound as sentiment would normalize. This is the fundamental case for the next major breakout in the gold shares.

      "Given the technical damage from the recent selloff (which went a bit further than expected) one should not anticipate this crossroads to be resolved anytime soon. Think months rather than days or weeks. Ultimately, the shares will break 55 to the upside in 2013 thanks to the combination of a breakout in Gold combined with stable costs in 2013. In the meantime the shares will consolidate providing you time to do your research and find the companies that will lead the next leg higher and outperform."

      Did the shares break $55 to the upside in 2013? They seem to be at $21 now... was there a split? Did that happen before or after you moved the goalposts?

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    4. Or:

      http://www.resourceinvestor.com/2012/10/10/gold-silver-will-soon-line-pockets-jordan-roy-byr

      or

      http://www.stockboard.com/blog/view.php/Market-Technician-Jordan-Roy-Byrnes-Charts-Predict-Precious-Metals-Will-Outperform

      "Gold has put in an important low amid extreme bearish sentiment. That is very encouraging. We should see a rally, and then a potential soft period in the summer or early fall. However, by the end of the year I think gold has a good chance to break past $1,800/oz. I'm more bullish on 2014 than on 2013."

      Or:

      http://seekingalpha.com/article/214201-why-so-much-ignorance-on-gold

      "Precious metals will continue to crush stocks for another five to seven years. However, a portfolio of quality emerging gold and silver stocks will outperform gold. Eventually silver will outperform gold. While we are bullish on the metals, we do agree with Altucher that silver is preferred and stocks are the way to go- as long as they are gold and silver stocks."

      In all seriousness, Jordan, your charts have been misleading you for over a few years now.

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    5. Oh god, this was even worse:

      http://www.commodityonline.com/news/Time-to-dump-stocks-for-gold-2011-02-23-36686-3-36687.html

      "If you are a regular Joe investor, now is your opportunity to be a contrarian and look smart in a few years. Mainstream managers now feel vindicated and feel a chance to promote stocks again. Don’t make the mistake many have already made twice. I’m writing this for the mainstream investor and the retirement investor because I don’t want to see them get sucked back into the market at the wrong time courtesy of asset managers who will find any reason to promote stocks."

      Wow! Since then the S&P's up 38% while GLD is down 17%. Um... GDX is down 63% and GDXJ is down 80%. That is stunning. Utterly stunning.

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  2. Liz Ann Sonders is a permabull...but at least a reasonable permabull. She works for Schwab so don't expect her to ever be bearish. I remember her from the late 90s. I've never seen her being bearish. Check out this guy who debunks her analysis. Her checklist is a joke.

    http://thefelderreport.com/2013/12/17/the-bull-market-top-checklist/

    The bulls are trying to compare today to 2000 or 2007 to say things aren't expensive. Yes, I agree the market isn't going to drop 50%. But there is a severe risk that it will give you no performance over the next 3-4 years. Look at 1915-1920, 1977-1982 or 1946-1949.

    Since I debunked that entire post you had to bring up one of my failed predictions. At that point many G&S stocks were up 50%-100%. It looked like the start of the next run and many metrics supported that 2012 was a major bottom. Yes I got that wrong and other things wrong in 2013. When Kitco interviewed me a year ago I did say the stock market had to stop going up for Gold to do well. I was correct about that. I've gone back and looked at the history of many markets and have found where I messed up and what I missed.

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    Replies
    1. Dude, give me a prediction of yours about gold or the S&P 500 from anytime in the past year that proved correct. Because frankly, the above are just plain embarassing. Did you predict months ahead of time the gold drop to $1200? The silver drop to $20? GDX dropping to $20? S&P 1800? NASDAQ 4000?

      Felder's another guy with a blog who cherry-picks charts he's found on Zerohedge to say we're at a top. Is there going to be no investment in capital stock over the next few years? Has household formation permanently collapsed? The US and European vehicle fleets are never going to be replaced? Have US gasoline prices hit a bottom?

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