Interesting Weekend Reading Article from the NYTimes
#1
Posted 13 October 2007 - 10:20 AM
You need to register to the NYTimes but, it's free and I expect most of you are anyway...or should be.
http://www.nytimes.c...ml?ref=business
Paul Tudor Jones II leans back in his chair and grins. The stock market is going to crash, and he knows it. “There will be some type of a decline, without a question, in the next 10, 20 months,” he says in his rich Memphis drawl. “And it will be earth-shaking; it will be saber-rattling.”
Coming from a financial speculator as prominent as Mr. Jones, a man with about $19 billion of short-term trading capital at his disposal, the words might be enough to send ripples through a stock market that, apparently defying logic, has been hitting new highs each day.
Except that the crash to which Mr. Jones refers occurred Oct. 19, 1987. His prognostication — brazen, and as impudent as the man himself — was made in a documentary called “Trader,” which was filmed in the year preceding that day.
Now, 20 years after the 508-point decline, several strategists are anticipating that the earth will shake again. Valuations are stretched beyond historical comparisons. The market, ever more volatile, is reaching new highs, ignoring a buildup of bad news. Most crucially, the strategists say, the sentiment that the market’s rise is infinite seems to have taken permanent hold....
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe
#2
Posted 13 October 2007 - 11:00 AM
klh
#3
Posted 13 October 2007 - 12:49 PM
#4
Posted 13 October 2007 - 02:43 PM
The article "The Man Who Won as Others Lost" is abased on a presupposition that history will repeat itself except with Tudor Jones being on the wrong side and Pretcher again being correct when market will crash on scale like 1929-32.
However, there are no direct comments attributed to Tudor other than a statement made by someone reputed to have contact with him who says that Tudor turned very bullish following 9/18/07 rate cut, which Tudor(like some on this forum) compares to 1998.
Also, the writer plays up Pretcher's sway on Tudor's thinking in 1986, while downplaying Pretcher's market calls as merely bearishness without stating that he was bearish for the last twenty years. We are left to believe that Pretcher will be right again, and those like Tudor that do not heed his advice will prove to be wrong because none can remain hot as Tudor Jones was for the past twenty years.
I am bearish, but the logic in this article is faulty.
This article is a prime example of why I stay away from financial reporting. My friend keeps trying to get me to read Barrons but I tell him that if the reporters in Barrons really had a handle on the financial markets they would no longer be reporters, they would be hedge fund managers. I agree that for someone who did not know the full story of Prechter's persistant bearishness for the last 20 years one would think he made a correct call in 1987 with the implication that Tudor Jones made the similar call based on Prechter's input and that Prechter and Tudor Jones have only recently diverged in their opinion.
What is that article about? Is it about Tudor Jones? Is it about Prechter? Is it about people who make calls for crashes? What the heck is the author trying to even say?