The pseudonymous Jesse Livermore returns to his mission of demolishing favourite bear arguments, hollow reasoning he thinks has served too long as an excuse to avoid investing.
The latest forray is on the subject of US margins, which for the last decade appear to have been much higher than during the half century that preceded it. Inevitable reversion to the mean, means corporate profitability must (one day) fall, say the pessimists. Read more
This post by FT commentator James Mackintosh is cross-published from the FT Long Short blog that James writes with John Authers. It’s well worth bookmarking.
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From Albert Edwards’ latest:
I was on gardening leave when the Dow reached its previous peak in October 2007. One echo from those days is that I was beginning to feel lonely. Pessimism (realism) is very rare on the sell-side so I took a coffee with my fellow bear, Bob Janjuah and cheered up tremendously, reinforced in my belief that this is all going to end very, very badly indeed. Read more
We retain our heavy overweight in 10y+ government bonds
…the stronger US economic data have shifted the market further away from our vision of sub-1% US bond yields. This does not concern us. We have been here many, many times before Read more
Bears are endangered and misunderstood. Here in the French Pyrenees, with only some 20 left in the wild, the authorities have been trying to introduce some Slovakian bears to the mountains to beef up the population. Their arrival has to be in secret and they are outnumbered one hundredfold by a gendarme escort. For bears, as I well know, are not too popular. Large demonstrations have been held in various towns against their re-introduction and some get ‘accidently’ shot – link. Needless to say, I’m not venturing out too much.
That’s from Société Générale’s uber-bear, Albert Edwards, who might want to stay indoors if he visits Paris on his way back from the mountains. Read more
One of the ways you could criticise many of the über-bears in the market is that — while they’re good at prognosticating doom — they just don’t explain well enough what investors should do to avoid it.
So kudos to Société Générale economist Dylan Grice on Friday. Read more
Dave Rosenberg has not taken Birinyi Associates’ attack on his bearishness lying down. In fact, Big Dave has taken – like lightning – to his newsletter.
First, a broadside against his insufficiently ursine compatriots: Read more
Strategists at Barclays Capital have been hinting for weeks that they were growing wary of the house’s hardline bullish view on equities.
While BarCap’s strategists have yet to issue an outright “sell,” a note published on Monday provided evidence that such advice cannot be far behind. Read more
Some thought the ‘sweet spot’ of the global economic recovery wouldn’t last till the end of the year.
But not Deutsche Bank. Read more
Here’s something to put the equity rally in perspective.