Although the great value investor died in 1976, according to his many writings and his 'deep value' approach if he were alive today I'd bet a lot of money on him saying, "Fuck the financials!" today. Confused? Click here. (Seriously, you should click and follow the link. You're intrigued by the mere mention of Benjamin Grahaman and his uber greatness. He was practically a money making machine. In comparison you completely suck at life. I'm not even kidding. You should really click or forever hold your piece...)
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Sunday links: a storytelling machine
2 hours ago
6 comments:
"Now overbought on government gayness"--quote of the year!
Mista B,
Hehe. I may or may not have been drinking heavily while flipping through my charts on the weekend.
Ben,
Your post definitely had a little more, how shall we say, animation than usual. Right on the money, though. Bernanke and company are attempting to follow the Japan anti-deflation handbook to the letter. It's really rather sad. I have several clients who keep wanting to jump back in the market every time the market rises a little. (I had increased cash levels across the board last fall.) One lady who now deserves the moniker "Mush" takes the cake. She controls one small account on her own, and she's been calling me freaked out about its performance. She's bought in at practically every top and sold at every bottom since December. Thankfully she finally gave me control of it. It makes me wonder about the many folks out there who aren't following this stuff at all. I can't tell you how many times people have told me the market is cheap. Frankly, I think we're in for further multiple compression. We may eventually get back to cheap, but we're nowhere near it now, imo. Those looking at forward earnings, one year's trailing earning, even five years' trailing earnings are missing the bigger picture. We've just gone through a five-year period of record profit margins and profits. A return to norm means at least another 20% haircut. An overshot, which is probably likely, means even more. And that's just with respect to margins. If revenue takes a step back (and there's reason to think it will), we could be looking at a really ugly multi-year bear. It's amazing to me, after so many difficult bear markets in history, that such a notion is almost completely dismissed. Then again, I know many people who are waiting for housing to turn around. Just human nature, I suppose.
"TheFinancialNinja, whenever man. I called that shit."
Also priceless.
I shorted KRE a bit early on the pullback from the 90 EMA and eventually took a loss but then made it back in a day going short BAC. Like shooting fish in a barrel . . .
Have to admit, though, I'm starting to think that from here on out, a trader will have to be more and more selective on the short side. Don't get me wrong, I see disaster on the horizon just as much as you but with bailouts coming left and right these days, making the obvious short calls is like swimming with sharks (yep, shark week on Discovery started yesterday).
Seems like financials are off-limits for the near future. I expect weakness in consumer discretionaries to help my P/L from here on out more than weakness from financials.
-Mike J
Correction:
90 EMA above is supposed to be 50 EMA.
-Mike J
Mike J,
Drinking and posting makes for a good laugh a couple of days later. Thats for sure...
Yeah. The easy money in financials is probably done.
I'm thinking the next big bubble is in US Treasuries. These bailouts aren't free and I see tax revenue absolutely collapsing on municipal, state and federal levels. I expect govie debt issuances to explode and yields to spike as buying interest dries up...
Also, commodities have a long way to fall...
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