Tuesday, October 6, 2009

It's Me, Your Resident Permabear

Do I still have a bit of egg on my face because of THIS post? Sure. I'm in great company though, and still believe the stock market will catch up to the real world economy soon enough. Here are some links to articles and quotes from so-called experts, all pretty much singing the same tune: There will be no V-shape recovery. Make sure you scroll to the bottom for 'Signs of Being a Permabear' :-)

“There’s a lot of risk going ahead of some big bumps. There’s a very big risk that markets have been irrationally exuberant.”

-Nobel Prize-winning economist Joseph Stiglitz

  • George Soros says the U.S. banking system is "basically bankrupt," in sharp contrast to Goldman's upgrade of the large banks.

  • Nouriel Roubini says "markets have gone up too much, too soon, too fast," and will retreat when economic news refutes the V-shaped consensus, Bloomberg reports.
  • Joseph Stiglitz told Bloomberg TV investors have become "irrationally exuberant" about prospects for a recovery. "There's a lot of risk...ahead of some big bumps." Current Roubini post HERE!

  • Christopher Whalen tells Tech Ticker the fourth-quarter will be a "bloodbath" for banking as says stocks rallying while the "real economy is dying" is not a healthy sign.
  • Meredith Whitney warned about the likelihood of a second credit crunch, especially for small businesses, a WSJ op-ed last week.

10 Signs We May Be Headed For An October Crash
Click on Signs to Read More

You Know You are a Permabear When…

Each time the market rallies, you declare it an “unhealthy sign of speculative excess”

The great majority of chart patterns always appear to be either rallies in a bear market or an imminent major top.

CNBC asks you to appear as balance to the optimistic Bull guests.

Good economic results are bad for the market – it will cause the Fed to keep raising rates; bad economic results are bad for the market -- its proof of the coming recession;

Sideways moves are actually just “setting up the market for the next down leg

You still rail against Nixon for taking the US off the gold standard;

Your colleagues think you should become a fixed income portfolio manager.

All the anecdotal evidence you see reveals excessive bullishness;

You have trouble sleeping when you take a long trade.

1. On days when gold prices drop, it's due to a government conspiracy;
2. When gold prices rise, it's because central banks have finally lost control of manipulating the gold market. Either that, or the masses have finally figured out their fiat currency is just paper.
3. If gold drops again the next day, see #1.

When companies make quarterly earnings estimates, its bad because a) its already built it, and b) its evidence of earnings management. Missing earnings, on the other hand, is bad, because, well, its bad.

You criticize any analyst that upgrades a stock from “Strong Sell” to“Sell”

The Yield Curve Inversion is a sure sign of the coming recession; As the inversion flattens, however, you note out how negative higher 10 Year Yields are for stocks;

Positive market commentary is evidence of “complacency” and proof that the market must go lower;

Any 10% rise in an stock is a “great shorting opportunity;”

You blame market rallies on ignorant bulls “who just don’t understand;”

You short anything that is in your parents' retirement portfolio – and are determined to outperform.

Special Thanks to Yahoo Finance, bloggingstocks.com, and bigpicture.typepad.com for content.


tsmagnum said...

The inevitable crash is taking longer than most thought,but it's better to call an early top than to be caught unprepared for whats to come;)Jesse Livermore and others make a fortune while others got crushed.
I really enjoy your site and I'm glad to see you posting more often.

islandminister said...

Thanks Mike,

In my humble opinion, it's only a matter of time before Papa Bear wakes up and chastises his teenage bull son for all his carefree, immature philanderings over the last couple years!

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