Are you a contrarian investor?

If so, Barrons just flashed a *HUGE* contrarion flag. Namely, news mags have an uncanny history of calling the end the a cycle just when the opposite is about to happen.

In this case saying the bear market is dead on their front cover is viewed by contrarians that one is just about to begin!

One thing that is certain in life is that which comes down must once again go up! (or vice versa)

As such, just as any augur, prognosticator, or soothsayer knows all too well is if you call it enough times, eventually you'll get it right eventually...even if you were totally wrong the first hundred predictions. It's not like anyone is keeping score of all the times you were wrong...all that matters is when you were right in the end.

So, is Barron's spot on? Probably not. However, next year they'll post a similar cover with a similar prediction, and if that doesn't turn out, they'll try again the year after that. Eventually, when the market does recover, as it certainly must, they'll toot their horn about how they called it first and were right all along.

Market Speculators really deserve the same respect as Meteorologists. It's all crystal ball divination. Seriously, a magic 8-ball would have as accurate of predictions.

Pretty presumptious to make a claim like that nine months away.

The only thing they probably got right was Obama not getting reelected

People love to be wrong. How many times have I heard over the past two years that the top is in?

Once a week at least. Don't fade the trend.

April 19, 2010 issue of Newsweek....

[atsimg]http://files.abovetopsecret.com/images/member/9244de3ec865.jpg[/atsimg]

Market topped within five trading days. Nice cliff-dive....

[atsimg]http://files.abovetopsecret.com/images/member/6cc2e658dd7f.jpg[/atsimg]

....followed by the [now] infamous "Flash Crash" on May 6.

The Barron's cover only confirms the state of excessive bullishness currently represented in the more traditional sentiment indicators. The AAII (American Assoc of Individual Investors), Investors Intelligence polls, along with mutual fund cash flows are flashing red neon...very reminiscent of the April top. From the contrarian POV, to ignore this set-up would be foolish, and not very profitable.

Not making a prediction, but if the majority of QE.2 is already priced-in here (as I suspect it is), we could see this market breakdown in relatively short order. The only question is how deep & disorderly ?

reply to post by OBE1


Nasdaq has nullified these issues. Breaking 2007 highs within a short time span it would seem.

It is the same with "xyz" fading gold through cotton. If you are using magazine covers and people like Tony Robbins to make decisions based on investing you deserve to lose every penny you have.

Originally posted by Dance4Life
reply to post by OBE1

 

Nasdaq has nullified these issues. Breaking 2007 highs within a short time span it would seem.

It is the same with "xyz" fading gold through cotton. If you are using magazine covers and people like Tony Robbins to make decisions based on investing you deserve to lose every penny you have.

Mission-Control-to-Dance-4-Life

Not sure if you're talking about the Naz Composite, or the Naz 100, but neither index has broken it's 2007 highs

Regarding the remainder of your post, if you read mine, I don't understand how you were able to deduce that I, or any other contrarian would position against a magazine cover. Apparently there's some other point you're trying to establish here.

Your comment about Gold is equally baffling, however I do recall you stating that you don't own any (aside from a Gold watch)...which only adds to my bewilderment. How does an active marketeer miss participating in the best performing asset class of the decade

reply to post by OBE1


I said within a short time span. As in "I expect it to break 2007 highs within a short time span."

I also reference NQ because it has surpassed its "double top" as referenced in your photo of the SP500 from previous levels in the year. Nasdaq has been the leader since the bottom and will continue to lead the SP500 -> DJIA. I at least guess that is what you were referring to in that chart above.

As for gold, like I said, it isn't that great if you take a look at an adjusted for inflation chart from 1980. I have subsequently made (and lost my share of course) quite a bit more from a diversified portfolio, but mainly US equities. My gold watch sits in my safety deposit box and is just collecting dust. Don't know where I would wear it to anyway, and probably wouldn't ever flaunt it because I am really not "that guy".

I'm not worried about gold, the investments I have left take care of my meager lifestyle anymore and interestingly enough I have done quite well for holding through this whole mess. Actually, quite glad it happened as averaging in lower and lower has led to great gains. Hope it happens again, but if you ask me QQQQ will be in the mid 60's within 1 year maximum.

Good luck to you in the future.

Originally posted by Dance4Life
As for gold, like I said, it isn't that great if you take a look at an adjusted for inflation chart from 1980

Citing the 1980 peak when Gold traded intra [briefly] at 850, is a common mistake, and recurring sound byte...typically, a kind of defensive logic employed by equity investors who failed to identify the metals market 02/03...maintained their mantra throughout Gold's subsequent rise, and find themselves priced out at current values. As someone who forfeited his share of $ in his formative years, I maintain that it is wiser to consciously acknowledge errors made, and learn, than to rationalize them away...especially if one's goal is to enjoy success, and longevity in the marketplace. Back on topic, I would encourage you to look closely AAPL. Count the wake of unfilled gaps leading to the recent recovery highs - check the current wedge - compare it to the April topping pattern - then browse the sentiment indicators.

My little caveat emptor, if you will.

reply to post by OBE1


Thats nice and all, but if you take the price of gold over 20 years, adjust it for inflation, it hasn't done anything. And that has been my investing lifetime. So I guess I cannot put it any differently.

My gold watch either goes up or down in value. I'll just pass it on to my kids, they just better not pawn it when gold hits $3,000.

reply to post by Dance4Life


Every asset class has it's time, it's cycle. There is a time to be in RE, general equities, commodities cycles, precious metals. The trick is to identify the cycle...the earlier, the better. How have stocks performed over the past 10 years ? Right, now, adjust the dollar value of your stock portfolio for a decades worth of inflation. Thanks, but no thanks. Inflation adjusted stock values...a topic equity investors never discuss.

The fact that Gold is still trading 1000 off it's 1980 inflation adjusted high simply tells us how early we are in the cycle. 2010 will prove another year, another 30% appreciation.

Watch the dollar

Are you a contrarian investor?
1-11-2010

Originally posted by leo123
If so, Barrons just flashed a *HUGE* contrarion flag. Namely, news mags have an uncanny history of calling the end the a cycle just when the opposite is about to happen.

In this case saying the bear market is dead on their front cover is viewed by contrarians that one is just about to begin!

On Nov 8, five trading days after the exuberant Barron's article was published, the broad market began to roll, failing to sustain the breakout of the April recovery high. I wonder if that fellow who denigrated contrarian trading strategies/sentiment indicators in this thread....is still holding the bag ?