Menu Close

Tipping Point?

No permabear am I, and my Model was LONG-ONLY until just before August 1, 2011 (since March 9, 2009: on Dr. Faber’s Bloomberg Rally Call.) To get a sense of the market I read highlights here (not so much), more so SeekingAlpha, and generally scour the web for coherent commentary. Other site suggestions?

I did note the Crash-warnings of some notable Bears (tempered with some uncertainty) and began ratcheting down risk in my allocations in May-June, looking for stronger signals to hedge with (add) shorts. My Model was up +7% YTD then, nothing extraordinary. I saw mixed signals, leaning bearishly but dubiously; maybe most here were utterly convinced after the Flash Crash (or forever, LOL) but I honestly wasn’t. That changed in mid-late July. One of my nagging justifications was a strange contrarian indicator: Alan Brochstein on SeekingAlpha.

I don’t know this guy professionally, nor do I have any feelings towards him, positive or negative; he’s a neutral factor in my world. Since I don’t buy single issue small cap stocks and that’s his focus, I’ve only been reading him off & on for several years now – because he was peripheral, I didn’t put the pieces together until this year. Reviewing his articles, I saw Brochstein’s market calls aren’t just bad or terrible – they’re almost always exactly the opposite of a winning strategy. I finally sat down & documented that in detail using his very own articles, quoted & dated: Brochstein is a phenomenal Wrong-Way Charley. (Admittedly, I didn’t put everything in a spreadsheet – that’s not essential, for opinions which can equivocate.) The gist is this: at key inflection point since early 2008 at least, Brochstein has consistently issued the WRONG direction call.

Why should AB matter? Brochstein has HUGE ‘market share’: some 65,000 followers. He also vociferously declares he’s no permabull, which – in theory, at least – suggests he could be wrong either way. That’s intriguing, but even better: Brochstein has zealot defenders & supporters who censor any “criticism” of their guru and fabricate or build-up his bogus claims. Where there’s smoke, there’s fire? The moderators at SeekingAlpha don’t want anyone to see or know this, but to Lee’s oft-repeated point: “SeekingAlpha is a cesspool of misinfomation.” (Pearls of wisdom are crushed by Eli Hoffman’s feet.)

Cherry-on-top: maybe it’s coincidental, but “Broch” (Yiddish slang) means failure, disaster, foul-up… no, I couldn’t make that up if I tried!

Again I ask: does anyone else have their own indicator to point to online, some bell-wether beyond a Hussman, Faber, Roubini – positive OR negative?

If my understanding is correct, the mass-media is starting to exhibit or reflect a fanatical polarization in Americans’ opinions. Americans are becoming more rigid, less reflective or measured, much more likely to be (uncritically) consuming media content that reflects their hardening views. Isn’t this true? Was this always so, or just typical in periods of economic malaise across other nations/cultures and decades?

Since 2001, I’ve noticed hard divisions between Bulls & Bears (when was the last Bull skewered here?) and between the deflationists vs. inflationists (esp. in 2004ish.) I don’t know if similar ideological churches formed & dissolved over ‘stocks vs. bond’ in the investor community back in the 1970s & 80s.

Today, Gold is one touch-stone, but stats show less than 0.1% of US household investable asset hold any kind of PM – so basically, ‘no one owns Gold.’ (In the USA.) Sound & fury signify nothing. Gold-bugs are still a very small sect, that hasn’t changed: ergo, no Bubble. Also, I don’t uncritically ‘trust their call’ (and never did) even while agreeing with most of their points. Does that make sense? I don’t necessarily want to see ‘like opinions’ now. Especially now.

Maybe investors are forming two camps: those ‘waiting for the next shoe to drop’ (doomers) or those arguing over deck-chair seating on the Titanic (optimists.) My own opinions might be validated by snarky shorts on Zero Hedge, but I’m looking for the other side of the argument too.

Where are there signs of intelligent life, on the interwebs? Or perhaps just another “Disaster” Brochstein for me to study closely?

Join the conversation and have a little fun at Capitalstool.com. If you are a new visitor to the Stool, please register and join in! To post your observations and charts, and snide, but good-natured, comments, click here to register. Be sure to respond to the confirmation email which is sent instantly. If not in your inbox, check your spam filter.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

RSS
Follow by Email
LinkedIn
Share

Discover more from The Wall Street Examiner

Subscribe now to keep reading and get access to the full archive.

Continue reading