Gyroscopic Investing

Adam1226 wrote: Ann Coulter is always such a breath of fresh air : )

Who knows...maybe it's true, but I wouldn't make that conclusion based on the data presented in the article.

More like a breath of hot air. 

murphy_p_t wrote: just bought ewj

You might want to buy some EWJ puts to hedge your bets...  They shouldn't cost too much (maybe 1% of your purchase price) and give you a lot of downside protection.

MediumTex wrote:

Adam1226 wrote: Ann Coulter is always such a breath of fresh air : )

Who knows...maybe it's true, but I wouldn't make that conclusion based on the data presented in the article.

More like a breath of hot air. 

+1000!! 

http://hosted.ap.org/dynamic/stories/U/ ... 8-09-01-18

The Fed has been intervening to make the Yen cheaper to help raise Japanese exports, which makes American exports more costly by comparison.  Uh, I can see the Japanese doing this, but why us?  I thought the Fed was supposed to be stimulating our economy.

Watering reactor #3 with defense department fire engines (today 3/19): http://www.youtube.com/watch?v=v8Tds5d-ApU

http://www.propublica.org/article/six-w ... -chernobyl

On the subject of our unpredictable world, it seems as if the Japanese nuclear disaster just keeps getting worse and worse, but for some reason the markets have simply stopped reacting to it.

That would have been very hard to predict.

MediumTex wrote: On the subject of our unpredictable world, it seems as if the Japanese nuclear disaster just keeps getting worse and worse, but for some reason the markets have simply stopped reacting to it.

That would have been very hard to predict.

It could be that the machines doing all that HF trading don't care--and the people who care, like us, are a small part of the financial markets.

MediumTex wrote: On the subject of our unpredictable world, it seems as if the Japanese nuclear disaster just keeps getting worse and worse, but for some reason the markets have simply stopped reacting to it.

That would have been very hard to predict.

I am shocked that the stock market has bounced back so much.  The middle east is in chaos (more than the usual amount) and the third largest economy in the world is suffering a nuclear disaster, and it all seems to have been shrugged off as no big deal.  That could of course change as these events play out.

Pkg Man wrote:

MediumTex wrote: On the subject of our unpredictable world, it seems as if the Japanese nuclear disaster just keeps getting worse and worse, but for some reason the markets have simply stopped reacting to it.

That would have been very hard to predict.

I am shocked that the stock market has bounced back so much.  The middle east is in chaos (more than the usual amount) and the third largest economy in the world is suffering a nuclear disaster, and it all seems to have been shrugged off as no big deal.  That could of course change as these events play out.

Back in the spring of 2008 when everyone was warning about trouble in the banking sector, the market dipped and then recovered, only to free fall later in the year. For those who had been listening to the talk about bad loans, housing bubbles, etc., the spring recovery provided some reassurance, but of a very deceptive kind.  I checked back to 1929 and found that the same thing happened then. 

In the mid-30's, after what appeared to be successful government intervention, John Maynard Keynes himself invested a big chunk of his own money in the stock market, hoping to benefit from the recovery.  Instead, he lost his shirt in the 1937-38 crash.  So maybe we should be a bit more guarded in our outlook.

I think it's important to remember, too, that we are in a cyclical bull market for stocks within a larger secular bear market.

These cyclical bull markets within secular bears always end in tears.

MediumTex wrote: These cyclical bull markets within secular bears always end in tears.

Until they don't. I guess that's the purpose of the PP.  We don't really know what's going to happen in the future, despite our hunches.

clacy wrote:

MediumTex wrote: These cyclical bull markets within secular bears always end in tears.

Until they don't. I guess that's the purpose of the PP.  We don't really know what's going to happen in the future, despite our hunches.

To clarify what I mean, a cyclical bull market by definition ends in tears.  If it doesn't end in tears it is the beginning of a new secular bull.

How do you know the difference between a cyclical bull and a secular bull?  If you decisively break through a previous high, you may be in the early stages of a new secular bull.  If you near previous highs and start to drift backward repeatedly, that's a cyclical bull market within a secular bear.

The U.S. has been in a secular bear market for stocks since 2000.  During that period we have had two cyclical bulls.  When will the current secular bear market end?  I would guess in the next 5-10 years (historically they have lasted 15-20 years).  Could it end next week?  I guess it could if the market gained 30% or so and never looked back, but I don't think that is going to happen....but it might.

Japan has been in a secular bear market for stocks since 1989.  When will it end?  Once the Nikkei gains another 400% it will be within striking distance of the 1989 highs.  I think that this miserable performance is part of why people are suspicious of the ability of quantitative easing to actually accomplish anything productive.  Bad demographics don't help.  Bad demographics and bad central bank policies can create incredibly bad outcomes. 

When in the middle of converging demographic and economic disasters you get hit by an earthquake, tsunami and have multiple nuclear reactors simultaneously melting down near one of the largest population centers on earth...well, I don't know how to describe that.  It's like the worst scenario I can imagine for a country to have to face, other than perhaps being on the losing end of a long war.

I wish I could figure out why the media has basically stopped covering the Japanese nuclear story.  It's like they are following the day to day developments (some outlets more than others), but they aren't drawing any larger conclusions about where this is headed.  Maybe they just don't want to scare people (which is sort of weird, because normally that is exactly what the media wants to do).

MediumTex wrote: I wish I could figure out why the media has basically stopped covering the Japanese nuclear story.  It's like they are following the day to day developments (some outlets more than others), but they aren't drawing any larger conclusions about where this is headed.  Maybe they just don't want to scare people (which is sort of weird, because normally that is exactly what the media wants to do).

The media covered the BP Gulf Oil Spill story with much more vigor, and with more experts, than the Japan Nuclear Reactor Meltdown story.  They're doing this even though the latter is potentially much, much worse in terms of local, regional, and planetary effect--and across many sectors/disciplines of human knowledge and awareness.  It's as close to Armageddon as we humans have come, short of the bombing of Hiroshima and Nagasaki during WWII.  Much more important to talk about right now, IMO, than Libya or anything else happening in the Middle East.  (To be clear, all are important.)

It's not just the American media doing this; I've noticed it on the BBC as well.  News reporters start off talking about which countries in the Middle East are shooting protestors, then make a brief mention of the latest dire nuclear event in Japan, move to a human interest story from the earthquake/tsunami (someone was reunited with Grandma who was pulled alive from rubble 2  weeks after the disaster, etc.) then treat us to the latest rantings from the Colonel. 

Since Colonel Sanders has the fried chicken business locked up, perhaps Colonel Gaddafi  (if he survives) can set up his new franchise related to something completely different.  Radiation-safe tents, anyone?

MediumTex wrote:
Japan has been in a secular bear market for stocks since 1989.  When will it end?  Once the Nikkei gains another 400% it will be within striking distance of the 1989 highs.  I think that this miserable performance is part of why people are suspicious of the ability of quantitative easing to actually accomplish anything productive.  Bad demographics don't help.  Bad demographics and bad central bank policies can create incredibly bad outcomes. 

You're almost making the contrarian argument as to why Japan is a buy. 

In one of his books, I can't remember which one, William Bernstein makes the point that, in the same way good companies are often bad investments, and vice versa, bull stock markets often occur in rotten economies...by the time the problems are sorted out, you've missed all the action. 

I'm not saying that I'm going to try to speculate on this, but, if I were going to speculate, I think I'd look closely at Japan right now. 

Then again...there's a reason I don't like to speculate

smurff wrote:The media covered the BP Gulf Oil Spill story with much more vigor, and with more experts, than the Japan Nuclear Reactor Meltdown story.  They're doing this even though the latter is potentially much, much worse in terms of local, regional, and planetary effect--and across many sectors/disciplines of human knowledge and awareness.  It's as close to Armageddon as we humans have come, short of the bombing of Hiroshima and Nagasaki during WWII.  Much more important to talk about right now, IMO, than Libya or anything else happening in the Middle East.  (To be clear, all are important.)

Japan is old news, the media is always looking for the next big thing.

Also, I don't think the problems Japan is having with their plants does have a significant environmental or health effect beyond the nearby areas - certainly not on a planetary scale.  There may be long term economic effects, and perhaps policy changes that in turn cause environmental problems (e.g. cause more resistance to nuclear power, thus increasing coal power reliance, that in turn hurts the environment much more than if we used more nuclear).  But I haven't seen any evidence that Japan is any sort of "Armageddon" except to the individuals who got killed by the earthquake/tsunami.

To me, this just shows the effect that QE2 has had on the market.  It seems that no matter what bad news happens in the world, the invetability is that another round of QE will drive the S&P 500 higher.  We could try to predict why, but this picture, I think, shows everything we need to know

Pkg Man wrote:

MediumTex wrote: On the subject of our unpredictable world, it seems as if the Japanese nuclear disaster just keeps getting worse and worse, but for some reason the markets have simply stopped reacting to it.

That would have been very hard to predict.

I am shocked that the stock market has bounced back so much.  The middle east is in chaos (more than the usual amount) and the third largest economy in the world is suffering a nuclear disaster, and it all seems to have been shrugged off as no big deal.  That could of course change as these events play out.

this further proves the genius of the PP.

laughing out loud over that paperclip.