Investment Grin Of The Day Google
Yet Another Hedge Fund Manager Warns About Imminent Bear Market
With the mainstream financial media being overwhelmingly bullish, I make it my mission to bring you as much bearish news as possible. For one simple reason. My mathematical and timing work suggests that a bear market of 2015-2017 is about to kick in. Andy Redleaf, CEO of $4.2 billion hedge fund manager Whitebox Advisors, sees the same thing.
- “I think it is a truly scary time,”
- “We do not know exactly where all the credit creation of this cycle has gone. Certainly money sits idly as excess reserves, but just as certainly money that would not exist but for unconventional monetary policy has distorted prices and resource allocation,”
- “There are some parallels with the collapse in home prices which preceded the financial crisis,”
- “It strikes me as completely plausible that a further decline in the euro triggers a recession in the U.S.,” Redleaf wrote. “The U.S. has a bear market, high-yield spreads move to 1998 type levels (1,000-1,200 [basis points]), U.S. weakness and market tightening of credit probably make the recession global.”
And so on and so forth. I think you get the picture. It is easy to look back today and say that anyone with an ounce of intelligence could have seen the 2000 and 2007 tops coming. Yet, very few people did. Why? For the very same reasons most people today refuse to believe that yet another bear market is possible. Greed, following the crowd, perpetuating today’s market condition and, quite frankly, stupidity.
Yet Another Hedge Fund Manager Warns About Imminent Bear Market Google
How Low Will An Upcoming Bear Market Go?
3/16/2015 – A strong up day with the Dow Jones up 228 points (+1.29%) and the Nasdaq up 58 points (+1.19%).
Jim Stack was fortunate enough to pick the 2009 bottom. Now, the president of InvesTech Research, which is on the Hulbert Financial Digest’s Honor Roll of top newsletters over the past 15 years, and Stack Financial Management, which manages more than $1 billion of investors’ money, believes we are on the verge of a bear market.
Here is what concerns him.
- Rising interest rates,” he explained, “can provide significant headwinds to a bull market,” which he calls “one of the more interest-rate-sensitive bull markets in our lifetime.”
- Margin debt has peaked and begun to fall. “Past peaks in margin debt have led or coincided with the start of past bear markets,” he wrote in InvesTech Research.
- Professional investors are extremely bullish, with bearish sentiment under 14%, “the fewest bears since 1987, just before the crash,” he told me.
- Corporate profits topped out more than a year ago, but S&P 500 earnings per share continued to rise until recently. That discrepancy is often an early-warning sign.
- Although the S&P 500’s current multiple of 19.9 times earnings is slightly below the average when interest rates are below 3%, that will make stocks especially vulnerable when rates do rise. And the median U.S. company trades at its highest valuation of the past 65 years, according to the noted finance scholar Kenneth French of Dartmouth College.
Nothing that I haven’t covered here before, but it nice to hear the same thing from somebody else. The question is, if a bear market does start, how low will it go? Jim suggests the following
A more likely outcome, he said, was for the S&P 500 to retrace about half of its bull market gains. If March 2 was the peak, that would mean it could fall to around 1,400, roughly a 35% decline.
I would say that is a fairly good estimate. And as I have suggested before and despite the fact that I am bearish, I don’t anticipate the markets to collapse as they did in 2007-2009. That was a mid-cycle panic. The upcoming decline will be more reminiscent of 2000-2002 decline on the Dow. Still, it wouldn’t make sense to be long here.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. March 16th, 2015 InvestWithAlex.com
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6 Reasons Why The US Stock Market Is NOT The Place To Be
Business Insider recently had a story on why the US stock market is the place to be. 6 reasons why the US stock market is still the place to be Let’s take a look. My comments are in red.
- US economic growth, as measured by GDP, has outpaced other G10 economies since the end of the recession and is forecast to keep doing so, as the chart below shows. So what, just because we outpaced everyone, doesn’t mean we can’t have a bear market here.
- US companies have been more likely to meet their forecasts for earnings growth than other developed countries over the past several years. Again, who cares, doesn’t mean we can’t have a bear market.
- US stocks have more exposure to faster-growing sectors like technology and health care. Yep, and the above sectors are in a massive overvaluation/speculation bubble.
- Higher US yields support higher valuations for stocks. You kidding….right?
- Price-to-earnings ratios tend to move in tandem with the dollar, and will climb if the dollar rally continues. Two things here. First, this utter nonsense. There is no long-term evidence to support this statement. And even if it was true, the dollar is about to reverse. As discussed in our weekly podcast.
- Adjusting for sector mix, US stocks are not expensive versus the rest of the world. The US stock market is massively overpriced and on par, if not worse, than 2000 and 2007 tops. I have shown the evidence of that here over the last few months.
In short, the points above is how the majority of money managers and investors out there think today. Unfortunately, their arguments hold very little water. A bear market here would make just as much sense, in not more, as the continuation of today’s bull market.
6 Reasons Why The US Stock Market Is NOT The Place To Be Google
Investment Wisdom Of The Day
“None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What’s required is thinking rather than polling. Unfortunately, Bertrand Russell’s observation about life in general applies with unusual force in the financial world: “Most men would rather die than think. Many do.” – Warren Buffett
Marc Faber Capitulates. Stocks About To Drop
Marc Faber has been one of the most outspoken and well researched bears over the last couple of years. Predicting anything and everything from an outright collapse to a prolonged bear market. With that in mind, it appears that Mr. Faber has finally capitulated on his bearish stance….
“I’m an investor, and I invest,” he told CNBC. “Do I want to buy European sovereign bonds at a negative yield where I’m sure to lose some money — not a lot of money, but some money — or do I want to be in some blue chip stocks? If I take a 10-year view, I think I will make more money in blue chip stocks.”
Listen, being a bear in a bull market is one of the most difficult things out there. No matter how good your research is, you begin to question your sanity and everything else in between. I remember shorting sub-prime lenders in 2006 and then wondering how it was possible for them to still increase in value. For another 18 months. When they did finally collapse, in the summer of 2008, some of them went from $70-80 a share to penny stocks in a matter of weeks.
Point being, I believe Marc Faber is switching to the long side at the maximum pain threshold. He is tired of this bull market proving him wrong, he is tired of everyone in the financial media making fun of him and he is tired of losing money/opportunity. Yet, there is another way to look at this. When a bear like Marc Faber finally throws in the tower, it is highly probable that the market top almost there. If not there already.
Two Hedge Fund Managers Discuss The Stock Market, Currencies, Commodities & Investment Ideas – Weekly Podcast
March 14th, 2015: We have a great show for you this week. Hedge fund managers Matthew Demeter and Alex Dvorkin discuss the following topics….
- What the stock market is doing and what we expect to happen over the next few weeks.
- COT Report and what the big guys are buying. Listen to make sure you are not on the wrong side of the trade.
- US Dollar & Other Currencies, Interest Rates, Gold/Silver, Oil, Bond Yields, Copper, Agriculture, Natural Gas and what we expect to happen in these markets.
- A multitude of great investment ideas and various tops/bottoms that can make you a ton of money.
- And of course, much…..much more.
Don’t miss this one and join us again next Saturday.
Listen to the podcast by clicking on the player above. If you prefer iTunes, please Click Here
How I Predicted The March 2nd Top. Dead On.
3/13/2015 – A big down day with the Dow Jones down 146 points (-0.81%) points and the Nasdaq down 21 points (-0.44%).
Going into the end of February my subscribers knew that we were facing a major turning point at the Dow 18,320 (+/- 50 points) and that it would occur on February 27th (+/- 1 trading day). If you are wondering, yes, +/- 1 trading day included March 2nd.
My advice was also rather simple, to go short right at the top. The actual top arrived on March 2nd at the Dow 18,285. In the final analysis I have missed it by 15-35 Dow points or 0.08%. Close enough. Since then, the Dow is down -3.7% Are we about to bounce or is this sell-off just getting started? Click Here to find out.
So, how was I able to predict the exact top well in advance?
I use two primary analytic tools and none of them have anything to do with technical analysis, fundamental analysis, quant, Elliot Wave, the Dow theory or the such. My unique mathematical and timing work took me over 10 years of trial and error to develop and I am not even done. Further, it goes well beyond all of the tools mention above. Let me give you an example and its application to March 2nd.
1. Cyclical Composition Of The Stock Market.
There are at least 50 cycles moving within the stock market at any one time. From long-term cycles spanning 100 years or more to cycles oscillating with 4 minute Intraday periodicity. What we see on a 2-Dimensional Price/Time chart is a shadow of what is really going on behind the scenes.
What we see on the stock chart is the summation of all cycles into a singular composite. As per example above. What complicates the analysis is the fact that these cycles are not continuous. They shift and jump according to their own DNA sequence type of a mechanism. Meaning, it is a dynamic system that needs constant adjustment. However, once you know how these cycles behave and their order, you should be able to predict the stock market with astonishing accuracy.
Now, a number of incredibly important TIME cycles were arriving on February 27th (+/- 1 trading day). That meant the market was likely to top out at that TIME. The next question was….. WHERE?
2. Mathematical Stock Market Composition.
That is where my mathematical work comes in. As I have suggested previously, the stock market has a mathematical structure that it traces out behind the scenes. It is hidden , unless you know exactly what to look for. Again, the market traces out this structure in 3-Dimensional space. Once you know how to measure it, you should be able predict exactly where the next turning point is. I describe the whole process in great detail in my Timed Value book.
For instance, this same work indicated that a powerful point of force was located at the Dow 18,320 (+/- 50 points). In my subsequent communications to my subscribers I have indicated that the exact hit would be at 18,310 and that I would go 100% short at 18,300. The Dow topped out at 18,285 (15 points away) on March 2nd and I went short soon after. It was as simple as that.
Now, the more important question is, are we about to bounce or will this sell-off accelerate down. Click Here to find out. If would you like to learn more about the process I use, you can start with two free chapters from my book Timed Value
Long-term, my work shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. March 13th, 2015 InvestWithAlex.com
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Investment Grin Of The Day
Overpriced Sectors That Are About To Collapse
A rather simple, but accurate look at today’s market environment. Unfortunately, the guy backtracks by suggesting we won’t see any sort of a decline in the equity prices over the next 12-18 months because the FED will not raise interest rates. Due to the strong dollar. In other words, continue to BUY (according to him).
I disagree. I won’t go into details, but my mathematical and timing work suggests that the FED will raise rates in June/July. Further, the dollar is topping out here and should reverse soon. This supports the FED case. And as soon as investors get this wake up call, expect rapid multiple contraction, just as described in the video below.