Éste largo reporter de hace aprox. 1 hora, está siendo de lo más comentado ahora mismo .... os pongo en antecedentes .... como ya sabéis por alguno de los reporters q. he dejado, S. Reity lleva desde hace un par de semanas con un sesgo bajista en los índices usa, pero en los dos últimos días ha enviado reporters en su "cuaderno trading" con comentarios alcistas y recomendaciones de compra de algunas acciones .... entonces mucha gente q le sigue se ha sorprendido pidiéndole q aclare su postura ..... y lo hace con este reporter, muy esclarecedor ..... ahí os lo dejo ....
I Am Not Objective
Reity, you sold me on the case to be net short. But you shifted so quickly back to the long side that I am highly confused in the logic applied. Please remind me why we are now bullish.
I am not an objective writer by any stretch. Instead I subjectively focus the commentary to support my point of view and often elide or avoid most facts to the contrary. Certainly I am not the only investment commentator guilty of this approach.
This bias was true when I was bullish for the past 6 years. There were always things a bear could point to that seemed off putting and might lead to a future collapse of the market. Yet I didn't talk about those things very often as it would be a distraction from the clear preponderance of the evidence which was positive. And we were right to be positive as we profited handsomely as the bull market marched higher.
So recently when the economic data started trending lower I started to give more credence to the bearish arguments. And so I got net short...and so I talked up that side of the argument...and so I didn't pay as much mind to the positives that still existed.
Given some recent emails from customers, I now better understand why it is so hard for some to switch back to the bullish argument. That is because my writing began to focus on the negative evidence to support our net short position...thus making it seem as if there were no positives to be found.
That was never really the case. I just focused on the negatives and neglected to remind folks of the positives.
So let's spend a little time today restating the positives to get everyone back on the same page:
• The primary trend has been bullish since March 2009. It is always safest to assume that the primary trend is in place until it is proven dead...or on death's doorstep.
• ISM Mfg may be teetering on contraction, but ISM Services says full steam ahead. It is possible that the economy can continue to expand with just the consumer carrying the load. However, any severe slowing in ISM Services or retail sales should have us reconsidering the merit of the bearish arguments once again.
• GDP is still on a Muddle Through Growth trajectory up around +2% annually. It may slip lower on occasion as it did in Q1...but it came roaring back in Q2 at +3.9% to make up for the shortfall. As it stands now Q3 GDP is likely +1-2%. Not great...not terrible. Just the same Muddle Through results which were good enough to create this 6+ year bull market.
• Bond rates are still very low. Investors who want any real rate or return need to look elsewhere. Stocks and real estate are their two best options for outsized gains. I prefer stocks because it is a more liquid asset you can sell anytime you would rather have your money elsewhere.
• China is still a potential problem. But the argument that they still could lower rates and increase stimulus to boost the economy has merit. As stated yesterday, there is smoke in China…but not necessarily a fire that will burn our house down.
• The recent market pullback squeezed the excess out of many stocks. That, plus lower bond rates makes stocks a more reasonable value at this time.
• The primary trend has been bullish since March 2009. It is always safest to assume that the primary trend is in place until it is proven dead...or on death's doorstep.
Yes, I repeated the first bullet at the end on purpose for emphasis because it is the most important part of the argument. If that were the only thing that mattered we would be back at 100% long...yet here we are at just 38% long. That is because there are indeed negatives out there that may germinate into something bigger over time.
Yet those negatives (which I concentrated on in my writing the past few weeks) may prove very temporary and we just keep muddling forward.
So yes, it would be wonderful if everything were black and white...to be 100% bullish or 100% bearish. But investing is rarely so easy. And it certainly isn't that easy 6.5 years into this bull market which makes it one of the longer ones in history. This longevity does not have me complacent like many others...as if the good times will last forever. Instead it has me on high alert for any problems that would lead to the next bear.
That is why 38% long is the right answer for me now. And I hope today's commentary helps more folks get on this bandwagon.
Best,
