Friday, December 18, 2009

Big Ben

Here is my latest post on "The Art of Contrarian Trading".

3 comments:

jeff said...

Carl,

I agree with your bullish stance on the dollar as it will make new highs. But not for reasons that oulined. To date, we still have yet to take care of the world's greatest excesses and debt leverage. In metaphoric terms, we need to finally burn the forest and let the natural healing begin. That means a full cleansing of our system instead of the articifial one we've seen due to the bailouts, articifial stimulus, and money printing.

Unless you've been living on Mars, a higher dollar will work in in opposite of oil, the Euro, and equities alike.

To illustate, the $USD went from ~$71 in July 2008 to $90 in March 2009 to $74 in November 2009.

Conversely, the S&P went from ~1,300 in July 2008 to ~666 in March 2009 to ~1120 in November 2009.

My sense is the S&P is on the verge of rolling over thanks to folks looking for a safe haven like the dollar.

As for your Bernanke thought, the Elliott Wave folks noted Paul Macrae Montgomery’s Magazine Cover Indicator (MontgomeryCap.com), who does a great job of explaining how news covers provide final punch line of a trend before it reverses within a month of so (with a 85% success rate). In this case, Bernanke is finally 'the man', but history will prove otherwise. Here are some comparisons:

1. Jeff Bezos of Amazon on 12/9/99when the stock was 113/share. Amazon declined 95% to a low at 5.51 in October 2001.

2. Andy Grove of Intel was Time’s 1997 Person of the Year, but take a look at that stock through August the next year.
3. Ted Turn in 1991, who founded CNN. Turner Broadcasting stock was down over 7% the following year.

Well, you get the point.

Kishore said...

Though I never liked Time magazine because of their dubious and exaggerated reporting, their coverage of Bernanke as "Man of the Year" marks the end of his dubious glory.

From a contraian point of view, is Time magazine not great at picking the tops?

In fact, as Bernanke has been the primary tool for transfer of wealth from American taxpayer to Wall Street, this should also mark the beginning of the end of Wall Street.

I thought Obama, especially after getting his Nobel Peace prize the same week he escalated the war in Afghanistan, and his hypocritical speech in Norway about peace, would have been a better pick.

curt said...

if you want to hold a contrarian view of Ben receiving man of the year then you would believe that in some period, likely soon, he will be viewed as buffoon of the year. For this to happen the economy will need to plunge into a second and perhaps deeper recession that the Fed will be unable to avert.
i simply can't see how a contarian view would interpret Bens "man of the year" award as being positive.