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Archive for February 4th, 2009

Still Not Yet Turning Up

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For several months now, business media has been flooded with prognosticators whose main argument for calling a market bottom and advising equity purchase amounts to little beyond the simplistic observation that a bull market has generally preceded emergence of the economy from a recession. Blindly, “If you wait until the recession is over, it’s too late to buy stocks at their cheapest, so buy now.”

Without showing the slightest inclination to understand why a bull market precedes emergence from a recession. That whereas the economy is like watching the bow of a huge vessel, the market watches the props and tiller, which set the direction long before the boat actually reflects a change.

So yes, the market quite likely will behave as it usually has, and move up before we’re out of this mess. But don’t expect it to do so when we’re still laying off over 25k more employees day after day after day, when we’re still cutting back on new equipment expenditures, when we’re closing down businesses left and right. Level out, and maybe the market won’t even wait for reversal of those trends before it moves back up. But as long as those indicators continue to plummet, don’t look for the market to find any steam to lift it out of the valley.

Besides, I still don’t see any major buying power standing ready to do anything more than a day or two of ass-covering. Until pension plans and other major institutions return to regular buying day after day after day regardless of market direction, there is nothing out there to support a bull market. They still don’t get it: much of that supposed “cash on the sidelines” is money that has left the market permanently, no looking back, no return.

So yes, we’re still 0% invested in equities, and still looking for lower markets as we move through the winter. I have distant hopes of maybe edging a toe back into stocks perhaps as early as the last month or two of this year, but I don’t think I’d be missing much of any bull market if we just hold our powder until 2010.

bumper sticker [] - calls & puts

Written by macheide

4 February 2009 at 5:59 pm

Posted in calls & puts

another speaking engagement

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scheduled to speak at a session of th enrolled actuaries meeting. my name tag was awaiting me at th podium; i’d not picked it up with th program materials at th start of the meeting. it just had AL in large script, nothing else needed. and had a lot of little stickers and notes attached to th name tag front and back, from larry d and others who wanted to see me while I was there

our topic was defined contribution plans. th woman who was to co-speak with me was annoyed when she found i was to speak. she had planned enough material for the entire session, now figured i would take up too much time, and that everyone would want to hear me instead of her. i said i could collapse mine to as little as 5 minutes, would gladly do so. she remained in a bad mood, would rather i would not have been on th program at all, that even my 5 minutes might overshadow her own presentation

i picked up my notes and started an introduction, very highly aware that th intro would be taking upwards of a minute from th 5 that i planned to spend. my notes were 74 pages, bound like a softbound book without a cover. th first few pages had crossword puzzles illustrating the points i would be making

when my co-speaker began her part, i stepped to the back of the room to greet robert dz, asking him how he was doing. he didn’t really wish to reply. all his pension plans were terminating, and milliman was holding him responsible

ben franklin and andrew jackson were up in a balcony seat, intrigued, thinking that some of the rest of my notes, that i’d not had a chance to speak of, would enhance their own works

Bumper Sticker [] - oneirra

Written by macheide

4 February 2009 at 4:04 am

Posted in oneirra