Monday, May 26, 2014

Some Mammorial Day news

If I heard correctly, apparently it's Mammorial Day in the US, when everyone listens to the music of Dolly Parton. Then they go out and buy fluffy pillows.

So here's some news:

Reformed Borker (Bork Bork Bork!) - the great rotation. Seems some clown with a blog who underperforms SPY every year was mocking this concept all year. Josh's take?
The Great Rotation market meme of early 2013 turned out to have nailed it, perfectly capturing what was happening in the investment business and, by extension, the major averages.

Stocks jumped on the first day of trading last January, never went negative on the year for even a second, rallied a historic 30% and finished the year on December 31st at a new record high. This was almost entirely driven by investors rebalancing their outrageously lopsided portfolios after five years of fear and apathy. Despite all the naysayers, flows into equity funds went mega-positive in 2013 while money going into bond funds slowed to a trickle. The fact that money hadn’t fled bond funds on a net basis is not the point – it was the change in trend that mattered and on that score, the Rotationistas (myself included, see here and here) were correct.

Marketwatch - four things the doomers got wrong. Let's summarize:
Elliott Wave analyst Robert Prechter, whose heyday was in the 1980s, got some notoriety a few years ago by calling for a market collapse. In July 2010, Prechter predicted that “the Dow, which now stands at 9,686.48, is likely to fall well below 1,000 over perhaps five or six years as a grand market cycle comes to an end.
“Without a dramatic change of heart by the [European Central Bank] and by European leaders, the single currency could break up within weeks,” declared The Economist in November 2011.
Peter Schiff, CEO of Euro Pacific Capital[:] in December 2009, he said it wouldn’t surprise him if gold hit the 5K mark “ in the next couple of years .”

Well, it did rally above $1,900 by September 2011, but it’s been downhill ever since. Still, in an interview last month, Schiff doubled down on his $5,000 forecast.
Faber [...] predicted last year on the open microphone CNBC regularly gives him, [the Fed] might “increase the asset purchases to say $150 [billion], $200 [billion], a trillion dollars a month.”
In summary,
But too many people have lost precious time and a chance to make real money by listening to these fear mongers. They’re probably kicking themselves now, or should be. The rest of us, who hung in there when things looked bleakest, are quietly smiling all the way to the bank.
That is precisely the reason why you should ignore forever anyone who got these calls wrong. And ignore forever anyone who even mentions the name of these clowns. The truth is hard enough to track down anyway: don't make the job more difficult by confusing yourself with known losers.

Telegraph - gold prices heading higher as wharrgarbl. As far as I'm concerned, the only thing that could positively affect Indian gold consumption would be Modi somehow transitioning India to a successful high-growth economy that generates a tremendous new secular wealth boom. However, I'm happy that this goldbug story is now getting play in the Telegraph: maybe, if the narrative becomes popular enough, London traders will start positioning themselves for a gold bull run, ignorant of the fact that their very positioning will be what drives the price higher.

IKN - hilarious "technical analysis on gold". I'm at work so I can't give this the satire it deserves, so I'll just say something something Rick Rule, something something Objectivism, something something chiseled features, something something very heterosexually.


  1. Schiff doubled down on his $5,000 forecast. Well, sure. I just doubled down on the number of houses I'm putting on Boardwalk in a game of Monopoly I've been playing. Which has about as much bearing on economic reality as anything Peter Schiff ever says.

    As for purplish golden prose, the common denominator in investment newsletter bullshit slinging is The Narrative. Because it's all about storytelling, not analysis. And the average retail sucker doesn't do analysis, he just looks for a story that seems real and buys it. When the story turns out to be tissue paper, oh well.

    And finally, you Canucks should be so lucky as to have a day on which the whole nation pauses to celebrate breasts.

    1. Those are hockey pucks, not breasts. Breasts are soft and they don't sting when they hit you in the face.