MM(mistermib)
Forumer storico
leggetevi attentamente Bob Janjuah di RBS...ocio che è un grande.....ne vale la pena, il linguaggio è molto "slang" di mercato..anche se l'articolo è datato è molto attuale...
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PILU
STATE SERENI
grande articolo grazie
MM(mistermib)
Forumer storico
uppiamo con un po' di ricerca...consiglio a tutti la lettura di Albert Edwards di Soc gen
MM(mistermib)
Forumer storico
ancora......
MM(mistermib)
Forumer storico
up
MM(mistermib)
Forumer storico
letture per il week end.....up!!!
palenque
Forumer storico
gipa69
collegio dei patafisici
BOB JANJUAH: THE S&P WILL FALL 50%
21 September 2009
Excellent thoughts as always from the superb RBS analyst:
21 September 2009
Excellent thoughts as always from the superb RBS analyst:
So, back from hols, and one thing is abundantly clear. Whilst the last 2yrs have not been much fun for anyone, it HAS been kinda ‘cool’ to have been seen not just as a Bear but also a Bear who was early and kinda right all the way thru this timeframe. But NOT anymore. It is clear to me now, based on feedback/comments/discussions/body language etc etc, that something has changed.
People now desperately want to see the back of the bad times (recession, bear markets) and now want to look forward with optimism. Even some folks who have been firmly in the Bob/Kevin camp thru 07, 08 AND 09 to date are getting nervous/shifting positions. You would all be AMAZED at the reactions I have seen from many market professionals to my piece (see below) written before I went away. Of course, some folks get their dose of Bob’s World from unauthorised ‘usage’ by the mass media – for the record, I do NOT as a rule speak to the media, I’d rather focus on clients – and as such will never see everything I write, but even some of those who get my comments in full as clients of RBS have homed in very sharply on the Stop Loss trigger I put in place below – S&P above 1022 for 4 consecutive days. YES, S&P did hold above 1022 for 6 consecutive closes, but each of these closes was pretty marginal, low volume days, where the close was well off the intra-day highs, and of course this week we have so far seen 4 consecutive closes below 1022, by a decent margin too. And that was after a super bullish ISM – could it be that ‘real’ expectations were/are now getting much more bullish? Or could it be that folks saw the very high Prices Paid line and fear inflation? Or could it be that some folks saw the level of the New Orders line and fear – based on history – that this is the cyclical peak? Time will tell….
Anyway, let me say 1st up that even though its all been pretty marginal, the RISK here is that over the next month or so we see risk assets go even better. This is a TACTICAL call and is NOT a change in the 3/6mth secular call, which REMAINS BEARISH. Andy Chaytor set some levels last week which I am comfortable with – there is a 60/40 chance that S&P
trades up to 1120ish by end Sept/early Oct. I think the next month will be volatile and NOT straight line, but on balance the risk is that by month end/early Oct, risk assets will be better. And YES, I know that Sept is seasonally one of the weakest months, that we are already 5% off the Aug highs, and that ‘everyone’ – even the bulls – think we need a period of pullback/consolidation, but for me the perfect head fake will be a strong (but volatile) Sept.
I do however think that we are VERY MUCH in the tail end of the correction of the Oct 07 to Mar 09 bear move, where S&P lost nearly 60% from peak to trough, and where the correction from the Mar low would, at 1120, represent the 50% retrace. Once what I assume is a bear mrkt correction finishes, over the next month or so, I expect the Bear to return with vengeance and I retain my call for NEW LOWS in equities. That’s 550 S&P!!
Please do not forget that vicious 40%/50% retracements are NORMAL in the middle of secular multi-yr bear markets. Look at the charts. Very clearly it is extremely common for sentiment to swing between extreme fear and extreme greed, and it is very common to see secular bearish trends in data punctuated by cyclical – usually govt/central bank/policy
inspired – spikes, which can last weeks to months to a qtr or 2. The critical question to answer is what is the secular trend and what is the cyclical trend, and when – assuming they are different – is one giving way to the other.
Why do I remain a secular Bear? Well, for me, I have yet to see ANY meaningful evidence of self-sustaining private sector demand, which I have said for many months is the key to a sustained/secular economic recovery and asset price recovery. All I see is growth and asset price gains driven by the willing and reckless destruction of government and central bank balance sheets. This is NOT sustainable IMHO. I continue to see a private sector that wants to pay down debt, increase savings, cut costs, take less risk. And I see the period of government and central bank driven boom times as rolling over very fast from here on in. Why? Because I think balance sheets and sustainability – govt, central bank AND private sector, MATTER. If they no longer matter, I will be WRONG, and I will have to accept that the policy of ‘Print/Borrow/Spend on Rubbish we don’t Need’ is a limitless phenomena, without consequences, which means there should never be a bear market ever again….I hope this sounds as ridiculous to you reading as it did to me when writing…..
Of course if I am wrong then additional Stop Losses are critical. For me, the next stop loss is at 4 consecutive S&P closes above 1120. I recognise that the weight of opinion/mood is against me, and that it would be far EASIER for me to roll over, get with the herd, and move to the bull camp. But I have yet to see anything that convinces me otherwise – the ISM going back up to 50 was what Kevin told me in Jan/Feb we’d see, by around August time – and critical here is the call on whether balance sheet health & sustainability matters or not. Until I see hard evidence telling me otherwise, I will run the risk of being labelled unpopular/a perma-bear/blind/stupid – take your pick, I have been called much worse…by my wife!
Kevin and I, back in Jan/Feb, said that, at that time, we were in the most risky phase of the bear market and that a 2 qtr rally in risk assets and eco data was the KEY SURPRISE/RISK. We were right. Now, in Sept, I think we stand at the most risky phase of the ‘bull’ market
(correction?), where a 2 qtr dive in risk assets and eco data will be the key surprise/risk. Let’s see if we are right, but if not, then clearly something extra-ordinary is happening and I will have to hang my head in shame and go back to school to learn how to teach, cook or drive a taxi.
It is also of course important to highlight that if I am wrong and if what the equity market is telling us is right, than govvie bond yields are going to explode higher, esp. in the UK and US, but this is a discussion for another day….
Disaster delayed? Not for much longer me thinks…SURE, the US has the advantage of a bit more fiscal flexibility and reserve currency status (for now) over say the UK, so I am fully prepared for MORE fiscal and monetary debasement in the US over the next few yrs. But even the US has limits/credibility issues, and if its not already clear it will become clear that the marginal return from such debasement is getting and will continue to get weaker and weaker. Here, the lesson from Japan post the 80s boom are clear – look at the Nikkei charts, a secular multi-yr bear market, punctuated by several vicious ‘govt-sponsored’ bear market rallies, none of which had any long term success, as the response of the private sector was, each time, to hunker down/tighten up/repair balance sheets in direct response to govt debasement.
My final point: the crossroads is only weeks away, and visibility is poor, thus it is extremely difficult to make big calls at this time, esp. when the call is against the growing weight of opinion. Something extra-ordinary MAY be happening and, joking aside, even if its not, precise timing is always difficult. But based on everything I know and see I would be using any further risk asset rallies over the next month or so as an oppose to sell risk/raise cash/get short, and to flip out of high beta risk low quality risk, into low beta high quality risk.
People now desperately want to see the back of the bad times (recession, bear markets) and now want to look forward with optimism. Even some folks who have been firmly in the Bob/Kevin camp thru 07, 08 AND 09 to date are getting nervous/shifting positions. You would all be AMAZED at the reactions I have seen from many market professionals to my piece (see below) written before I went away. Of course, some folks get their dose of Bob’s World from unauthorised ‘usage’ by the mass media – for the record, I do NOT as a rule speak to the media, I’d rather focus on clients – and as such will never see everything I write, but even some of those who get my comments in full as clients of RBS have homed in very sharply on the Stop Loss trigger I put in place below – S&P above 1022 for 4 consecutive days. YES, S&P did hold above 1022 for 6 consecutive closes, but each of these closes was pretty marginal, low volume days, where the close was well off the intra-day highs, and of course this week we have so far seen 4 consecutive closes below 1022, by a decent margin too. And that was after a super bullish ISM – could it be that ‘real’ expectations were/are now getting much more bullish? Or could it be that folks saw the very high Prices Paid line and fear inflation? Or could it be that some folks saw the level of the New Orders line and fear – based on history – that this is the cyclical peak? Time will tell….
Anyway, let me say 1st up that even though its all been pretty marginal, the RISK here is that over the next month or so we see risk assets go even better. This is a TACTICAL call and is NOT a change in the 3/6mth secular call, which REMAINS BEARISH. Andy Chaytor set some levels last week which I am comfortable with – there is a 60/40 chance that S&P
trades up to 1120ish by end Sept/early Oct. I think the next month will be volatile and NOT straight line, but on balance the risk is that by month end/early Oct, risk assets will be better. And YES, I know that Sept is seasonally one of the weakest months, that we are already 5% off the Aug highs, and that ‘everyone’ – even the bulls – think we need a period of pullback/consolidation, but for me the perfect head fake will be a strong (but volatile) Sept.
I do however think that we are VERY MUCH in the tail end of the correction of the Oct 07 to Mar 09 bear move, where S&P lost nearly 60% from peak to trough, and where the correction from the Mar low would, at 1120, represent the 50% retrace. Once what I assume is a bear mrkt correction finishes, over the next month or so, I expect the Bear to return with vengeance and I retain my call for NEW LOWS in equities. That’s 550 S&P!!
Please do not forget that vicious 40%/50% retracements are NORMAL in the middle of secular multi-yr bear markets. Look at the charts. Very clearly it is extremely common for sentiment to swing between extreme fear and extreme greed, and it is very common to see secular bearish trends in data punctuated by cyclical – usually govt/central bank/policy
inspired – spikes, which can last weeks to months to a qtr or 2. The critical question to answer is what is the secular trend and what is the cyclical trend, and when – assuming they are different – is one giving way to the other.
Why do I remain a secular Bear? Well, for me, I have yet to see ANY meaningful evidence of self-sustaining private sector demand, which I have said for many months is the key to a sustained/secular economic recovery and asset price recovery. All I see is growth and asset price gains driven by the willing and reckless destruction of government and central bank balance sheets. This is NOT sustainable IMHO. I continue to see a private sector that wants to pay down debt, increase savings, cut costs, take less risk. And I see the period of government and central bank driven boom times as rolling over very fast from here on in. Why? Because I think balance sheets and sustainability – govt, central bank AND private sector, MATTER. If they no longer matter, I will be WRONG, and I will have to accept that the policy of ‘Print/Borrow/Spend on Rubbish we don’t Need’ is a limitless phenomena, without consequences, which means there should never be a bear market ever again….I hope this sounds as ridiculous to you reading as it did to me when writing…..
Of course if I am wrong then additional Stop Losses are critical. For me, the next stop loss is at 4 consecutive S&P closes above 1120. I recognise that the weight of opinion/mood is against me, and that it would be far EASIER for me to roll over, get with the herd, and move to the bull camp. But I have yet to see anything that convinces me otherwise – the ISM going back up to 50 was what Kevin told me in Jan/Feb we’d see, by around August time – and critical here is the call on whether balance sheet health & sustainability matters or not. Until I see hard evidence telling me otherwise, I will run the risk of being labelled unpopular/a perma-bear/blind/stupid – take your pick, I have been called much worse…by my wife!
Kevin and I, back in Jan/Feb, said that, at that time, we were in the most risky phase of the bear market and that a 2 qtr rally in risk assets and eco data was the KEY SURPRISE/RISK. We were right. Now, in Sept, I think we stand at the most risky phase of the ‘bull’ market
(correction?), where a 2 qtr dive in risk assets and eco data will be the key surprise/risk. Let’s see if we are right, but if not, then clearly something extra-ordinary is happening and I will have to hang my head in shame and go back to school to learn how to teach, cook or drive a taxi.
It is also of course important to highlight that if I am wrong and if what the equity market is telling us is right, than govvie bond yields are going to explode higher, esp. in the UK and US, but this is a discussion for another day….
Disaster delayed? Not for much longer me thinks…SURE, the US has the advantage of a bit more fiscal flexibility and reserve currency status (for now) over say the UK, so I am fully prepared for MORE fiscal and monetary debasement in the US over the next few yrs. But even the US has limits/credibility issues, and if its not already clear it will become clear that the marginal return from such debasement is getting and will continue to get weaker and weaker. Here, the lesson from Japan post the 80s boom are clear – look at the Nikkei charts, a secular multi-yr bear market, punctuated by several vicious ‘govt-sponsored’ bear market rallies, none of which had any long term success, as the response of the private sector was, each time, to hunker down/tighten up/repair balance sheets in direct response to govt debasement.
My final point: the crossroads is only weeks away, and visibility is poor, thus it is extremely difficult to make big calls at this time, esp. when the call is against the growing weight of opinion. Something extra-ordinary MAY be happening and, joking aside, even if its not, precise timing is always difficult. But based on everything I know and see I would be using any further risk asset rallies over the next month or so as an oppose to sell risk/raise cash/get short, and to flip out of high beta risk low quality risk, into low beta high quality risk.
MM(mistermib)
Forumer storico
grazie gipa,tra l'altro sarà a Lugano il 15 ottobre e andro' ad ascoltarlo..
