In the next six months you will witness one of the greatest economic comebacks in the history of mankind.
Unemployment will tumble and the rate will be 7%. There will be a new and aggressive energy policy ensuring our independence. There will be a new and massive housing reclamation similar to the 1980’s RTC that will bail out homeowners while giving investors access to property under current market prices. You will see banks fixing their balance sheets and corporate America will have the opportunity to repatriate trillions in offshore profits, no questions asked. The economic numbers will be messaged to always be better than expected and Chairman Bernanke will continue to worry aloud about slower than hoped-for growth, ensuring ZIRP and stimulus-at-the-ready, forever.
Can you see where I’m going with this?
The only thing different about this year versus the past two is that this is an election year. In the past two years, the major indices began a rally in the September-October time-frame and rallied in an almost uninterrupted fashion until about tax day. Each time it was on the back of better than expected economic numbers and more stimulus. Each year followed the same game plan of doing the same thing over and over again expecting a different result. Is this the very definition of insanity?
Regardless of my disdain for the current economic regime, I know enough not to short anything in the face of strength (but I am getting very tempted). I am long a few stocks, but not nearly enough. My suggestion is not to confuse brains with a bullish market environment, regardless of the fundamental backdrop (do you really think the job numbers mean anything? They don’t).
Enjoy the rally, the Superbowl and the weekend!
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too many managers under water from last year and need to make it quick !
limited amounts of money in the marekts (in theory) so this has to be a greater fool theory.
smells like sell in may and go away, with perhaps a minor pullback in the near term – maybe
How about, don’t confuse brains with getting it wrong.
Looking thru all the data for the last few months, one thing is clear..Automakers with their 24/7 building is what is holding up econ numbers and railcar traffic. Now looking thru ISM non manf we have homebuilders joining the party. The Auto Dealers aren’t giving rebates on small cars and even pushing up the prices on them because people are out there buying them like crazy (not the case for SUV’s and Trucks). But as we know, Automakers will produce more then what is needed and start to lay off workers again, maybe by Scott’s April 2012 time when people are hit with a major tax bill..I totally blame the Dancing Kia Soul Hamsters for the rally, lol.
But for the rest of the world, PMI’s spiked over China New Year Build and should be a lot lower next month based on estimates of China Import/Export data.
It’s interesting how any time something spikes, your opinion is that that’s a guarantee it will be lower next time. But sometimes spikes last more than just a brief moment. Or they are not spikes at all. Hence why you have been on the wrong side of an apple trade since, what, the 200’s?
And you were short the market at what price?
Although you said these are paper trades, luckily. So for that reason I don’t mind calling you out on it. But seriously. Maybe it’s time for a new thesis or admitting defeat. We are all wrong sometimes.
Hard for me to see us staying above Dow 10k this summer. Very hard.
The tidal wave of tax increases that will come from an obama re-election are going to scare the ____ out of the fund manager crowd. Just like every summer, for the last 3 years, we are crashing. Except this time, due to expensive oil, there won’t be any fed safety net. Down. Then sideways, then more down. In fact, i don’t think we will see any more V bottom rallies for many years
I want to agree, but that’s tough because the companies that move the indexes still have a strong balance sheet and probably will keep it that way so its going to be the way u pick stocks and talking about the dow as a whole for example check the NDX vs COMP u get what i mean..
Love the posts Scott.
As you have said many times before.
We are JAPAN.