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#21 NAV

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Posted 10 July 2018 - 12:38 AM

yo robo everybody know about hussman   http://www.fortunefi...imism-and-pride

 

I have never understood this Hussman cult. How can anybody have a negative 40% 10-year return in a roaring bull market and yet be worshipped ?

 

Hussman personifies academic arrogance and the concomitant inflexibility that comes with it. Market requires certain kind of creativity and pattern reconition and a fundamental understanding of crowd behaviour, adjustment to dynamic market conditions, which are not taught in text books. You cannot fit a theoretical model to human behaviour. Valuations cannot be based on some static models, which ignore the fact that valuations are a function of amount of liquidity in the system. Unless you have a way to dynamically adjust your valuation models to prevailing liquidity conditions, you are doomed. 


Edited by NAV, 10 July 2018 - 12:40 AM.

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#22 NAV

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Posted 10 July 2018 - 01:11 AM

This is from Hussman's recent market comment:

 

 

So what was legitimately “different” about the recent advancing half-cycle? The difference wasn’t about valuations. It wasn’t about market internals. It was about limits. In prior market cycles across history, a particular set of market conditions offered a reliable warning that speculation had reached its limits. Once market action was characterized by a full syndrome of “overvalued, overbought, overbullish” features, the market typically became vulnerable to air-pockets, panics, and crashes. If market internals hadn’t already deteriorated, they typically did shortly after those “overvalued, overbought, overbullish” warning signals emerged. So historically, one could respond to those warning signals pre-emptively, adopting a negative market outlook even before internals had explicitly deteriorated. Not this time. Once interest rates hit zero, unlike previous market cycles, these warning signals posed no limit to continued speculation.

 
Wrong. No bull market top has ever occurred over the last 100 years without the internals diverging or deteriorating. The cumulative A/D line has always diverged with price before a major market top has been registered. Now with that kind of overwhelming evidence, what's the need to pre-empt the market, based on an unproven valuation model ? 
 

 

 

 In hindsight, imagining there was some limit to speculative recklessness was my greatest error in over three decades as a professional investor.

 

That's 100% correct !. Wise men like Richard Dennis talked about this way back in the 80s, when he said "Never put a boundary on how high or how low a market can go". Finally he admit's that it was his imagination and had nothing to do with reality. 

 

Folks thought that the market was extremely overvalued when the S&P P/E hit 26 in 1991. When it hit 33 in 1999, they thought it was insanity. Finally it topped out at 46 in 2000. Never pre-empt a bull market.

 

 

 

 Late last year, we adapted our methods to prioritize the condition of market internals ahead of those “overvalued, overbought, overbullish” warning signs, with no exceptions

 

Finally he learns that market internals trumps valautions. 


Edited by NAV, 10 July 2018 - 01:16 AM.

"It's not the knowing that is difficult, but the doing"

 

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#23 OEXCHAOS

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Posted 10 July 2018 - 08:43 AM

For once, economists (real economists who focus on economic principles rather than pretending that they're good at measuring data and predicting every economic wiggle) should have been on the right side of this market for the past 9 years. It's just simple supply and demand vs. opportunity cost. Lots of liquid money, finite places to invest and limited number of stocks, and not owning stocks gives one ZERO chance of a positive net of inflation return. Blows my mind.


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#24 tsharp

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Posted 10 July 2018 - 12:20 PM

 

Good post, Chief... I see a major top coming later this year, but am not yet sure if it is THE top for the US equities... my reasoning is due to what appears to be Asia's seemingly only getting started in their own bull markets as below...  if so, my guess is that we will enjoy a sympathy ride with them.

 

Nikkei 225

 

N225_M_6.30.18.jpg

 

 

Hang Seng

 

HK50_M_6.30.18.jpg

 

Shanghai

 

Shanghai_M_6.30.18.jpg

 

Anyway... just more food for thought.



#25 robo

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Posted 10 July 2018 - 07:24 PM

I had forgotten how many Hussman Haters we had here at Traders Talk.  I could care less what Hussman said, last week, last month or last year. Some of the tools he used to spot the 2000 and 2007 tops are still valid and that's what I stated. This thread was based on tools for doing that, and I provided data and charts based on that. I also commented that I use historical patterns as "one" of my tools for trying to spot tops,  and commented on Cheifs chart. It really never changes here...

 

Same old sh*t just a different year...

 

No Problem -   I'm going back to being just a lurker again. Most of the traders I follow didn't even post in this tread.

 

Good trading.



#26 da_cheif

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Posted 10 July 2018 - 07:37 PM

I had forgotten how many Hussman Haters we had here at Traders Talk.  I could care less what Hussman said, last week, last month or last year. Some of the tools he used to spot the 2000 and 2007 tops are still valid and that's what I stated. This thread was based on tools for doing that, and I provided data and charts based on that. I also commented that I use historical patterns as "one" of my tools for trying to spot tops,  and commented on Cheifs chart. It really never changes here...

 

Same old [bleeeep] just a different year...

 

No Problem -   I'm going back to being just a lurker again. Most of the traders I follow didn't even post in this tread.

 

Good trading.

there are no hussman haters here...just those who look at his history and determine  that he is clewless about the stockmarket.....as an economist he probably has no peers but he hasnt learned like many that mixing FA with TA .....is like mixing  water with gasoline...ur market engine wont go.....and lack of independent thinking has led many traders on  the road to ruin......



#27 NAV

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Posted 10 July 2018 - 11:46 PM

 

 

Some of the tools he used to spot the 2000 and 2007 tops are still valid and that's what I stated. 

 

No it's not. It has not worked for 10 years, which is a fact. Time to re-examine and re-calibrate. 


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#28 NAV

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Posted 11 July 2018 - 03:05 AM

 

 

 

Some of the tools he used to spot the 2000 and 2007 tops are still valid and that's what I stated. 

 

No it's not. It has not worked for 10 years, which is a fact. Time to re-examine and re-calibrate. 

 

 

Sorry, not 10 years. It has not worked since 2010.


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#29 OEXCHAOS

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Posted 11 July 2018 - 10:19 AM

I went to NU with John. He graduated from the same program I did. He's unarguably smart and from my experience and from what I've heard he's an invariably nice fellow.

 

I definitely don't hate him. I'm just amazed that he got it so wrong. I feel bad for him. It has got to suck.

 

I wouldn't count him out, certainly, and in fact, smart people, once they own their mistakes, can bounce back hard. But, I'm less inclined to put much credence in any top call from him until I seem him on the right track.

 

Mark


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#30 NAV

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Posted 11 July 2018 - 09:53 PM

I went to NU with John. He graduated from the same program I did. He's unarguably smart and from my experience and from what I've heard he's an invariably nice fellow.

 

I definitely don't hate him. I'm just amazed that he got it so wrong. I feel bad for him. It has got to suck.

 

I wouldn't count him out, certainly, and in fact, smart people, once they own their mistakes, can bounce back hard. But, I'm less inclined to put much credence in any top call from him until I seem him on the right track.

 

Mark

 

No question about it. He is an incredibly smart guy. I hope he does some introspection, re-examine his model and bounce back.


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