Just a quick post to show the sentiment swing that has caused/enabled the bear-market rally off of the March stock-market lows. The chart above is Intrade.com’s “Recession in 2008″ contract and it is now at new lows, putting the odds at less than 25% vs. 80% at the height of the March panic. I’m guessing that the pendulum will soon start swinging back in the other direction.
Just a quick post to show the sentiment swing that has caused/enabled the bear-market rally off of the March stock-market lows. The chart above is Intrade.com’s “Recession in 2008″ contract and it is now at new lows, putting the odds at less than 25% vs. 80% at the height of the March panic. I’m guessing that the pendulum will soon start swinging back in the other direction. Cheers.
Interesting WSJ article and chart that suggests a turning point may be near. Readers of this blog know that I was on the “housing bubble” story from before it even came on to most people’s radar screens, writing stories and selling my Washington, DC co-op for 6x the purchase price and then renting in the summer of 2004, which is exactly when the rate of price change peaked and reversed, with actual prices peaking the following year. Now that rinse cycle is closer to the end than the beginning. Now on to the article:
A nice buying opportunity is presenting itself, with plenty of inventory, low prices, low interest rates, limited competition (for now), etc. As usual, the rich are the ones who get first crack at the action (takes money to make money!).
Sunny Side of the Street
America’s wealthy see buying opportunities in sluggish real-estate market
By AMY HOAK
MarketWatch
April 16, 2008
CHICAGO — Is now a good time to buy real estate? The size of your paycheck likely will play a big part in how you answer that question.
While many average Americans are skittish about the housing market, some of the country’s richest citizens see the current conditions as perfect for buying, according to the Annual Survey of Affluence and Wealth in America, released on Tuesday by the American Express Publishing Corp. and Harrison Group, a market research and consulting firm.
An interesting article from the NYT.
What I don’t understand is why people aren’t alarmed, shocked, and spurred into action by all this. I mean, for a long time it’s been clear that the American “healthcare” system is broken from the citizen’s perspective and works great from the special interests’ perspective.
The existing system needs to be scrapped and rebuilt from the ground up, but that’s not going to happen until people stand up for each other instead of only caring about themselves.
In America, we’ve got 48 million uninsured people and millions and millions more “insured” people who “have” insurance, but can’t afford to actually get the healthcare they need. Both of those groups of people clearly should be standing up, even marching on Washington.
One reason why that isn’t happening is that they can’t afford to do that because they are basically slaves to the system and can’t afford anything except their slave quarters, slave food, and slave clothes. And even that can be taken away in the blink of eye by the boss, so people keep their mouthes shut, keep slaving away, thankful master doesn’t beat (fire) them today. That’s a pretty strong analogy, and exaggerated for effect, but it’s a sad state of affairs and nobody seems to be doing anything about it.
But what about all the millions of people who are cozy and content? Why do they not care about the others? If they care, why don’t they do something? I don’t understand it. Actually, I think I do understand, but I don’t like it. It’s a negative cycle and it needs to be turned around into a positive cycle.
Ok, enough on this topic that really gets me heated up. Now on to the article. The comments in [brackets] are mine. The bolding is mine.
John Mauldin clarifying some “Recession” confusion (denial) that’s been going around lately.
Also a correction on some housing numbers.
The key numbers and what they mean:
Interesting piece from Michael Krieger at Sanford Bernstein. Along the line of this recent post of mine.
The main purpose of the trip was so I could attend a tech event on Thursday night (you can read more about that on The BuzzPal Blog). Friday we around Stockholm all day, then came back to Gothenburg on Saturday morning. Great trip. Thanks Albert, Anne, DJ, Robert, and Susanne! More pics below:
Another interesting article along the lines of this one on Dyslexia and Entrepreneurs.
ScienceDaily
Sep. 7, 2005
Odd Behavior And Creativity May Go Hand-in-hand
These images summarize the results of near infrared spectroscopy scans of schizotypes, schizophrenics and normal controls during divergent thinking tasks. Image (a) illustrates where the probe holder was placed for the brain scan. Image (b) shows the increase in oxyhemoglobin, which corresponds to an increase in brain activity, that occurred in both the right and left hemispheres of all three groups. Image (c) shows the increase in oxyhemoglobin in the right hemisphere of schizotypes compared to normal controls, while image (d) illustrates the much greater activation in schizotypes over schizophrenics. Image (e), which compares the different reaction of schizophrenics and normal controls, shows no difference between the two groups. (Courtesy of Park Lab)
ScienceDaily (Sep. 7, 2005) —
Often viewed as a hindrance, having a quirky or socially awkward approach to life may be the key to becoming a great artist, composer or inventor.
First update since this post on November 9, 2007. That post exactly marked GOOG’s reversal off it’s all-time high, after the 3-month relief-rally off the August lows. Today’s chart shows the end of that 40% bloodbath. Same as back in November, Google stock is the bellwether. It tells you pretty much all you need to know.
The other things to watch remain commodities, the Chinese market (and the other BRICS), and the dollar, which I’ve been bearish on since (before) this post on April 6, 2004. Back then one Euro cost $1.22, now it costs $1.59 (30% more).
I actually think the dollar will probably catch a bounce once the Fed makes its final interest rate cut of this cycle. That’ll probably also mark the top of the massive commodity and commodity stock run, as money rotates (see this). We will see. Those are just probabilities and scenarios to watch for. As always, the technicals must confirm and the market is always right (or at least it doesn’t pay to argue with it!).
It’s interesting to see more and more people realizing the value of domain names. I’ve been building my portfolio for about 10 years and each year revenue grows, with little effort. It’s the real estate of the virtual world.
February 1, 2008
New York Times
Coins in the New Realm
By BRAD STONE
HOLLYWOOD — Xavier Buck planned to spend $100,000 to bid for domain names, those parcels of virtual Internet real estate, at a live auction here last week.
He blew past his limit in less than an hour.
By the time the three-hour auction had ended, Mr. Buck, the chief executive of the Luxembourg-based company EuroDNS, had spent $150,000 for 15 appealingly generic names, including 7th.com, chaptereleven.com, microfinancing.com and computersystems.com.
“These names will pay for themselves within two years,” Mr. Buck said, as he sat in the ballroom of the Renaissance Hotel with a business partner who wore an identical gray suit and shirt with the company logo. “The world is only now beginning to discover how important it is to have these assets.”
First, I hope nobody shorted MOS! It’s just on the short watch list. And it still is, but commodities and commodity-related stocks riding the trends. See below for a great little Sanford C. Bernstein summary that’s been going around for a while and is still 100% relevant. Previous MOS update here.
A good one from John Mauldin’s “Outside the Box” newsletter. It’s all about leverage and mean reversion.
Five Delectable Examples of “Stein’s Law”
By Dr. Woody Brock
The most basic statement of Stein’s Law says: “If something cannot go on forever, it will stop”. More specifically, the late Herb Stein stressed that, when a trend cannot go on, it always stops–even when nothing is done about it. This yardstick of common sense is particularly apposite today, as we see in the following five examples of trends whose time has come and gone.
Just a quick update on this March 28th posting in Mosaic Company (MOS). You can see the stock got a big pop on the earnings report and is now hanging at it highs. It’s still on my watch list (for the short entry, not the long one). Should break pretty good one way or the other, but maybe not until after April options expiration. Cheers.
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