I’m a believer in the theory that the average investor loses money in the markets. On average, people believe they are above average. Most investors believe that they can beat the markets and not lose money without doing much homework. My grandma continues to buy bonds that I find absolutely revolting and have yelled at her about. I am not smart enough to come up with my own ideas as I lack creativity. That’s ok, because I use Prim’s algorithm to effectively sort through ideas of others and augment the good ones and discredit the bad ones.
Peak-Oil throws a wrench into my gears and complicates any future foresight that I’d be able to have on my own. That said, at least I don’t deliberately create misinformation to try to drive down the prices of the most undervalued opportunities and drive up the prices of the most overvalued opportunities. Here are some of my latest favorites:
On Thursday we landed a fun indicator: “Only 48 times has this number been at current levels in the past. 47 out of those 48 times, the market was higher 3 months later.”
Will recently noted:
“Has anybody else noticed that large-cap quality names are very cheap as well? If I managed billions I’d be going to town right now. MSFT, PG, JNJ, ABT, IBM, and so on have grown free cash flow at a healthy clip over the past decade and have recently been using it for massive buybacks and nice dividend increases. P/FCF rates are in the low teens, while revenues and net income are still growing at a decent rate.
I don’t think we’re at the end of the secular bear market for U.S. stocks yet, but how cheap can these get? At current prices these companies could buy back all of their stock in less than a decade.”
Bill Alpert is still trying to short the cheapest and best opportunities in the world. Herb Greenburg is right there alongside him. The short interest in some of the cheapest, fastest growing companies that I know of is surely an unprofitable long-term strategy.
US Treasuries as a “long term asset” is a fallacy. The FED, although they may be the biggest idiots in the room, still gets the privilege of buying as many of them as they want as they have an infinite supply of money. Don’t go short until the FED starts tightening.