Last Thursday our webmaster attempted to upgrade our blog to the latest software level and in the process encountered difficulties. As such we had to retrieve our blog posts from the last four years from backup files. The posts made after 9/29/12 were not in the primary backup and are shown here based on another backup source. We will be posting as usual going forward. At the moment I have nothing really to add to the previous comments posted here. The markets are pretty much acting as we expected, but tomorrow is always a new day.
Post from 9-30-12
What Obama Could Have Done
An updated copy of the performance chart for our tracking funds at Marketocracy (through September 30 2012) is shown on our main site in the Outlook area. We maintained a defensive posture since late 2005 and plan to continue until Washington gets it act together and addresses the issues at hand. In the next few days we will update you with performance charts through the end of last quarter as well as some portfolio snapshots for position adjustment within the year. Here is an article on what Obama could have done in the past four years. It kind of follows points we made last week although the points concerning what more the Fed could have done, I disagree. http://www.nytimes.com/2012/09/30/sunday-review/obamanomics-a-counterhistory.html?smid=pl-share”
Post from 10-1-12
A New Quarter and Uncertainty
I am just reading my emails from the weekend and saw this by John Mauldin. While we have always provided links to John’s letter I am posting this today because I think it is so good. “The only thing I can be certain about regarding Europe is that Europe is an uncertain mess. But the markets go on treating all these pressures as if they were not real. And, indeed, perhaps the mess will all get sorted out.It is my belief that we focus on risk because it is something that we can model. The economics profession has physics envy. Economists like to think of themselves as scientists, but I must say that I am not convinced. Economics has a great deal to teach us, but it cannot tell us much about certainty. It can’t even help us all that much to avoid risk. I fear we don’t pay enough attention to uncertainty because we cannot reduce it to an equation. How did you price in the risk of Catalonia succeeding from Spain, even two months ago? The answer is that no one did.The US market seems to be focused on the “fiscal cliff” that will inevitably create a recession unless Congress does something. The fact that doing nothing will clearly create a recession gives me some confidence that even Congress will figure out a way to avoid doing nothing. What has not been priced in is what Congress will do about the deficit. Depending on what they do, what we get will be hugely positive or negative. But we remain totally uncertain as to what they will actually do. And so for years we have ignored the looming train wreck that is unfunded liabilities. It is the fact that the results of inaction on the deficit are uncertain that allows Congress to keep postponing the inevitable. About these matters there is no scientific basis on which to form any calculable probability whatever. “
Post from 10-2-12
‘The technical indicators that we watch are catching up to the macro fundamentals that we have outlined recently. We will keep you updated when they occur. In the meantime the Dollar / T-Bond ratio is holding in well and we are monitoring it for an eventual technical breakout confirming the fundamentals that support a long dollar / short T-Bond macro play. Our webmaster should be putting updates on the main site later today or tomorrow with position and performance reviews through the end of the third quarter.’
Post from 10-3-12
Waiting for Something
‘The overall market topped on 9/14/12 and the tech stocks topped on 9/19/12. Since then we have seen a modest back off but the Bernanke put seems to bring buyers in the market on every little decline. We will wait to see what develops.
Post from 10-4-12
‘Lying seems to be in Vogue’
Lying is In. Greece has lied regarding its fiscal circumstances; Spain has lied; we suspect that Portugal and Italy too have lied, and Romney lied. It seems to be in vogue everywhere. Greece has lied about its fiscal situation, Spain has also, Portugal and Italy are following, and now it has come to the U.S. Unless Romney is just a flip – flopper, which we know he is, his main points last night involved denying what he and Ryan have been saying. No question that Romney had the energy last night and won the debate from a debate standpoint. Whether or not the substance will be backed up going forward is another thing. For sure the Democratic pundits have been too sure of themselves. Obama likes to govern from a spirit of rationality and compromise which we know has not served him well during his term and certainly didn”t work with a combative Mitt. I have to go back to our comments this past January in the Eureka-Perspectives main site section: to quote 2012 Market Outlook ” 10) Obama’s crowd still doesn’t get it, Harvard ideas will not play in this election. In order to win they have to harness the anger of the middle-class and regain the grassroots that Howard Dean worked so hard to develop. To date that direction lacks solid leadership. They will have to turn that anger into positive forces in order to win. To Obama’s benefit is the fact that little economic things are happening everywhere, wars are ending, alternative energy production is increasing, the U.S. Auto industry was turned around, and government employment costs are declining.”So the coming weeks will be interesting. I am not sure who I want to win from a trading stand point. No doubt short selling will work better with Romney-Ryan in the driver seat. George Bush provided excellent trading performance for us, we just faded him and it worked in gold and short stocks. So far that has not worked with Barack Obama. Life for the middle-class will be a different and negative story if Romney wins, so they have a choice, there are more of them than any other group.
Three new sections will be added on our Main site today, (accessed from the home page):
“Performance 9/30/12“, “Position Snapshots 2012“, and “Inflation / Deflation Update”