The investment..speculation, out right gambling thread

[qdogpa]

<p>I used to like Kass, but he has become too full of himself…he is looking for a rip upwards, but why pay for his insight , when qdoga has said the exact same thing of an upcoming rip…which should be sold,imho…if you followed me when isaid 12,000 before 13,500, when 13,500 looked certain,you be happy. :)</p>

<p>Also told you oil was 80 before 105, and you’d be happy again. :)</p>

<p>And this is free, though donations are welcome. ;)</p>

[dstark]

<p>Lol…</p>

[dstark]

<p>Doct, are your weekly IWM puts already in the money?</p>

[razorsharp]

<p>

Summary</p>

<p>I have slightly adjusted my S&P 500 fair market value downward from 1485 to 1455, but the market is still about 10% undervalued.
A trading range of 1290 to 1455 seems probable for the balance of 2012.
Reward vs. risk is favorable, with 4.5x more upside than downside.
The world’s stock markets are hostages to Greece, but I expect Merkel & Co. to step up.
Successfully containing the eurozone debt crisis (or even evidence that the Greek Democratic Party will forge an election victory) will likely result in a spirited market rally.
Changes</p>

<p>Last month, I replaced my four 2012 scenarios with new 2013 economic, corporate profit and stock market outcomes – it produced a S&P 500 fair market value calculation of 1485.</p>

<p>Let’s investigate what fundamental, sentiment and valuation changes have occurred since my last fair market value was updated four weeks ago.</p>

<p>U.S. Economy: A Mixed Bag. Domestic economic data have been mixed relative to my expectations. First-quarter 2012 real GDP growth likely came in a tad under 2%, and second-quarter 2012 real GDP growth should be in the 2% to 2.5% range. Nevertheless, we still seem destined to muddle through with 2% real GDP growth in 2012-2013. Payrolls growth seems stuck at a slightly below consensus level, and the rate of growth in manufacturing activity is decelerating modestly. On the other hand, some major positives for global growth include the drubbing in commodities (a tax cut to the consumer and a prop to corporate profit margins, which opens the door for more stimulative monetary policy around the world), the improvement in housing (the sector represents the greatest divergence in economic series relative to consensus) and still-healthy/elevated consumer sentiment.
Europe’s Economy: On the Precipice? The continued debt crisis has resulted in much more risk to economic growth in the eurozone. Greece is moving toward a depression, Spanish yields have recently spiked, and even Germany’s manufacturing PMI is falling (to 45.0). While I had expected Greece to exit the eurozone in 2013, there is now a distinct possibility that the nation’s exit is imminent (particularly after its elections two weeks ago). The new Greek elections in mid-June will be telling as to what the future holds – yesterday an opinion poll suggested the possibility of a win for the pro-bailout parties, which could ease concerns that Greece will exit the currency bloc. For now, the U.S. stock market seems hostage to European developments. Many, including Harvard’s Niall “We Are About to Start the Second Half of Our Great Depression” Ferguson, are concerned that a European Lehman moment is at hand, but I continue to expect that eurozone authorities will ultimately move to create an FDIC-like facility to insure European bank deposits and will seriously consider floating euro bonds.
China’s Economy: Slowing but Not Yet a Hard Landing. A soft landing seems the base case scenario, but there are emerging question marks (e.g., seven months of lower PMIs and lower energy consumption statistics).
Corporate Profits: Still on Tap for $100-Plus S&P 500 EPS in 2012 and Further Growth Seen in 2013. Approximately one-sixth of aggregate S&P profits come from Europe, but most of our corporations’ European sales/profits are derived from the strongest members of the eurozone. Over there, eurozone real GDP growth is likely to be down by less than 0.5% in the first half of 2012; the second half is problematic, and visibility is weak into 2013. The U.S. remains the best house in a bad neighborhood – with 2% real GDP growth and 2% inflation, nominal GDP growth is likely to be over 4% this year, translating to 5% to 7% sales and profit growth.
Investor Sentiment and Expectations: Low. The known negatives seem increasingly discounted: a month of near-double-digit market losses, a flopped Facebook (FB<em>) IPO, the disclosure of a large derivative loss at JPMorgan Chase (JPM</em>) and a possible Greek exit from the eurozone. Contrarian alert: The domestic equity fund outflows in the first half of the month of May were more than 4.5x the average over the first five months of the year (which was a record) and even greater than the first five months of 2008-2009! Financial Times featured a cover story on “the death of equities,” which is another sign that we are at a negative sentiment extreme. Meanwhile, trading volume is evaporating, down 7% last week (over the prior week), down 30% year over year and down 40% below its peak in 2010. Frankly, if someone had told me year ago that the U.S. would be growing at a 2% real GDP rate, with a 1.75% 10-year U.S. Treasury yield, I would probably have projected a market P/E closer to 16x-17x vs. to the current 13x. Stated simply, stocks have become an unpopular asset class.

</p>

<p>Here’s part of the first page.<br>
I don’t pay for the service, I just registered as a user for the free part. I am not sure why I get the whole article but others don’t.</p>

<p>COP spun off Phillips and is now just and E & P company, I think.</p>

[qdogpa]

<p>I get that for free also</p>

[razorsharp]

<p>

Deflation is eventually good. It’s the only thing that will allow us to enter into a new era of economic expansion. But the poor spending decisions, both public and private, have to experience their natural consequence. If that entails suffering, it isn’t ultimately avoidable just because it’s undesirable.

</p>

<p>[Commentary:</a> Here’s The Thing About Deflation - Seeking Alpha](<a href=“http://seekingalpha.com/article/632411-commentary-here-s-the-thing-about-deflation?source=email_macro_view&ifp=0]Commentary:”>http://seekingalpha.com/article/632411-commentary-here-s-the-thing-about-deflation?source=email_macro_view&ifp=0)</p>

<p>What do you think if this guy’s view, dstark?</p>

[dstark]

<p>I think with deflation there will be winners and losers, but overall…i don’t see how deflation solves the debt overhang.</p>

<p>I think this guy is wrong about Keynes too, but then again, Keynes was a genius and the writer of the article isn’t. </p>

<p>There is this psychological need to punish those that took on too much debt. A part of me wants to see that too. But really, how is deflation going to solve the too much debt issue?
How is cutting government spending, right now, going to solve the debt crisis?</p>

<p>One reason the job numbers are so horrendous is because state and local governments are cutting jobs. A lot of jobs…and if the federal govt created as many jobs over the last 3 1/2 years…as it did during the Reagan years…the unemployment numbers would be way down.</p>

<p>I am telling you right now, no matter who wins the next election, and
this isn’t political, becuase it doesn’t matter who wins…we are not going
to have these massive austerity programs in this country. Because they
don’t work. </p>

<p>I am all ears though. Explain to me how deflation and cutting govt will make the economy better?</p>

<p>I appreciate the link. I think you should check out the link for Kass’s
previous letter, and I am saying this based on what doct wrote. Because I think Kass was pretty bullish. ;)</p>

<p>The stock market drops 10 percent every 18 months on average. The bond market’s move might be unprecedented in this country.</p>

<p>So…a guy who is selling his long ideas at the top of the market…right before the market took a hit that occurs every 18 months and selling bonds short right before they have a huuuuuge run…HUGE RUN…well…no trophy for him.</p>

<p>Doug Kass does not know what the stock market is going to do. There is nothing wrong with that…but then he goes on tv and pretends he does know what the stock market is going to do…He sells himself as this seer…when he isn’t.</p>

[Hugcheck]

<p>Dstark that Shiller P/E graph and the attendant regular P/E graph are shocking. Thanks for that link. I suppose some folks knew in 2008 that a market P/E over 125 was out of wack. Did you? What do you think it says about now? Still seems a bit high tho not in the Volleyball high serve and spike territory like 2007-8-9.</p>

<p>I agree that austerity and deflation makes no sense against debt. I always assumed they’d inflate us out of debt with a return to 1977 (Carter years) inflation. I was not looking forward to that. Tho the stock market might like it.</p>

<p>And I agree that if Kass (as you or someone posted a link) suggested buy stocks n May and dump bonds why would anyone listen to him now? </p>

<p>I must say Qdog has made this dumpy market more fun for me as I am sorta rooting at this point for 12000, lol. Then let it jump back up =). Go go Power Rangers!</p>

[DocT]

<p>Monday could be interesting:[Watch</a> for avalanche of sell orders Monday - The Tell - MarketWatch](<a href=“Opinion and Commentary - MarketWatch”>http://blogs.marketwatch.com/thetell/2012/06/01/watch-for-avalanche-of-sell-orders-monday/)</p>

[dstark]

<p>Hugcheck… I did not like the stock market in 2008.</p>

<p>I agree. We are not in the nosebleed areas now. I don’t know what to think now because I don’t know how governments around the world are going to act.</p>

[DocT]

<p>[6</a> Reasons Stocks Have Likely Entered A Bear Market - Seeking Alpha](<a href=“6 Reasons Stocks Have Likely Entered A Bear Market | Seeking Alpha”>6 Reasons Stocks Have Likely Entered A Bear Market | Seeking Alpha)</p>

[qdogpa]

<p>Here are the top 20 Potential change stocks for Monday, updated after th close on friday…</p>

<p>Site is run by john bollinger, and i enjoy reading his lists everyday…and i can say,i have never seen so many short type etfs,etc in a list</p>

<p><a href=“http://www.equitytrader.com/lists/?list=1[/url]”>http://www.equitytrader.com/lists/?list=1&lt;/a&gt;&lt;/p&gt;

[dstark]

<p>Qdogpa, you have to sign in to access the site…</p>

<p>Doct…interesting link…so…is that your thinking now? Bear market?</p>

<p>Now we have Doug Kass against the guy who wrote the bearish piece. Somehow, I find it hard to see how both can be correct. :)</p>

<p>I like a lot of what the bearish guy brought up…the correlation between the economy and the stock market, the debt, length of time of bull markets, volume, etc…</p>

[qdogpa]

<p>The ‘lists’ are free…the rest of site is pay,i had a free subscription wahile back,and found the site very useful,info such as pivot points, etc…but being frugal,lol, i chose to not subscribe</p>

<p>Come to think of it,perhaps you need to sign up to view free stuff like the lists,cost is zero to do…</p>

[DocT]

<p>I don’t know if we’re going into a bear market - 20% correction or more. As you’re aware, I listen to that ECRI guy who said last September that by the end of this summer, the data will be in to show that we have been in a recession. That being said, there were no indications of how severe or what the market was going to do. The recession in the early 2000’s was mild yet the market had a significant drop probably because of high valuations of a lot of stocks particularly tech. I don’t usually follow anybody blindly in regards to what or when to buy and sell. However right now, I’m pretty cautious in my holdings. A month ago I reduced my 401k’s to 60% equities and 40% cash that was yielding 3.3%. I’m selling puts in my regular accts except for aapl which is hedged and utx (which I still can’t do anything about) which is hedged, vz and I purchased t at some point last week. Nobody except qdogpa seems to know what is going to happen. I’ll probably remain cautious until at least June 17.</p>

[qdogpa]

<p>12,000 before 13,500. :)</p>

[ellemenope]

<p>Anything special happening on June 17th? </p>

<p>Also, 12,000 is definitely looking like we’ll hit it this week. Any thoughts on when 13,500 will happen?</p>

[DrGoogle]

<p>Is there any chance it could go down to 11,000 and not 11,900 as qdogpa predicted?</p>

[razorsharp]

<p>The question is whether Greece will remain in the EURO. If they exit it means they will default on their debt and possibly create a run on European banks outside of Greece. Greece has not been able to form a government and there will be elections on June 17th. If the pro stay in the EURO and work through austerity party wins, it means one thing. If the don’t put up with austerity party wins, it means another.</p>

[dstark]

<p>Doct…ok…you have a lot of common sense…</p>

<p>Just wondering if you are selling puts while you are bearish.</p>

<p>Doct…that is not really what ecri said in september, is it?</p>

<p>I can see why Ecri, and Kass, and Cramer, and Tilson, and the Fast Money guys, etc…can make a career out of selling themselves…just by reading the posts on here. </p>

<p>People give these guys a very long rope. </p>

<p>When you are trading, and investing to a slightly lesser extent…</p>

<p>What is important?</p>

<p>Time and price, right? Time…right? Time.</p>

<p>ECRI says we are in a recession and what happened to stocks?</p>

<p>Kass is bullish and he hates bonds…what happens to stocks and bonds?</p>

<p>These aren’t tiny moves…</p>

<p>Tilson hates BKS…then the stock explodes up…oh by the way…“I am
long, and the stock is worth 30”.</p>

<p>Great… now people who follow him get whipsawed.</p>

<p>The Fast Money guys. When JPM first broke…i kind of remember one of the brothers saying he was buying the stock and buying calls…thanks for that advice.
Cramer…I can’t tell what his opinions are…they change by a person’s heartbeat. I am kind of enjoying listening to him these days though. I don’t know why. :)</p>

<p>Ok my views…
I am not going to give a time…the stock market will go up someday…because of x, and it will go down someday…because of y.</p>

<p>I do think if bank accounts are insured in Europe…there wil be a rally. I am not going to say when though. I have to check the stars.</p>

<p>Qdogpa…free costs too much for me. :)</p>