I mentioned earlier this week (and in the weekend linkfest) the amusing piece penned by Mike of Hedgefolios.
Last chance:I’m putting together the opposite list: "You Know You Are a Perma Bear When…"
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You Know You Are a Perma Bear When…
March 10, 2006 5:29pm by Barry Ritholtz
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You know you’re a perma-bull when you have capital gains stuck up your butt… and perma-bears have opportunity losses stuck up theirs.
You know you’re a perma-bull when you’re laughin’ your ass off at perma-bears.
You know your’re a perma-bull on the way to the bank, with the shit-load of money you made bein’ a perma-bull.
You know you’re a perma-bull when you wake up in the mornin’ and you’re not a dumb mofo!
when everyone says you should be a fixed income portfolio manager.
1) You’ve “called” 5 market tops in the past 3 weeks.
2) Even when losing money on a trade, you take pride that you’re not paying any margin interest.
3) you have at least 5 “tulip-bulb” jokes ready to use at all times.
4) you refer the market crash of 1987 and the NASDAQ crash of 2000 as “the good ‘ole days.” (bonus: LTCM actually MADE you money).
5) you maintain a list of similarities between 1929 and whatever is happening today.
6) you buy lots of gold, but your wife has yet to see any of it…
7) you have trouble sleeping when you take a long trade.
8) you declare that “the consumer is definitely tapped out” any time the mall isn’t crowded.
9) you have trouble forgiving yourself for not selling GOOG short at $475.
10) Barry Ritholtz is your hero for calling for a 6,000 Dow in BusinessWeek.
Permabear:
You worry about the world’s oil supply
You worry about negative savings rates
You pooh pooh the “dark matter” theory instead of embracing it
You worry about inverted yield curves, M3, trade imbalances and the federal deficit
You are concerned about the housing bubble
You wonder why so many companies are buying back stock while insiders are selling so much of it
You question the numbers that the government provides (CPI, unemployment, GDP, etc)
Gold bugs:
You rail against Roosevelt for confiscating gold
You rail against Nixon for taking the US off the gold standard.
On days when gold prices drop, it’s a conspiracy by banks and governments to depress the price.
On days when gold prices rise, it’s because governments and banks have finally lost control of manipulating the gold market. Either that or the masses have finally awakened to the fact that their fiat currency is just paper. If gold drops again the next day, go back one step.
Sorry, I wasn’t payin’ attention, so I’ll have to correct the context of my former offering and make a switch-e-roo:
—
You know you’re a perma-bear when you eat your opportunity losses (or shorting losses) and perma-bulls are feasting on capital gains.
You know you’re a perma-bear when perma-bulls are laughin’ their asses off at you.
You know your’re a perma-bear when you’re watchin’ perma-bulls on the way to the bank, with the shit-load of money they made bein’ perma-bulls.
You know you’re a perma-bear when you wake up in the mornin’ and you ARE a dumb mofo!
—-
Look, the point I’m trying to make is: Maybe there comes a time to wake up and realize that permabearishness, just for its own sake, may be as much a human failing as unrequited bullishness is at times.
My whole thing (and I have a rather simple mind) centers on just two concepts; evaluating PE multiples and attempting to evaluate forward-looking macroeconomic strength. One is a black and white issue, with historical guidelines; the other is alchemy.
My idea is that PEs are too high (maybe from 10-40% or more too high), and economic prospects aren’t good enough to offset the overly-high PEs.
But, can economic strength and earnings rise fast enough to offset what I’d normally consider to be a reasonable further contraction of PE multiples, which I consider to be above historic norms?… Yes they can. And, that means stocks can rise marginally even as PEs contract marginally.
I’d then be right on market PEs, but wrong on the economy.
Can economic strength and earnings decline, even into recession, and still PE multiples expand, for whatever reason known only in the hearts and minds of market participants?… Yes they can. And, that means stocks might not suffer a large enough drop to suck perma-bears out of hibernation.
I’d in that case be right on the economy and a dumb mofo on the market.
I’m tryin’ to decide right now whether I’d like to be right more than I fear bein’ a dumb mofo.
But even that can be turned around. I wrote earlier, in another segment, about advice you might offer to a person who asks your opinion about playing Russian Roulette for $1 mil, with a 6-shot chamber and 1 live bullet.
I think most reasonable people would think if he did play, he’d be a dumb mofo.
But, if he played and won… then you’d be a dumb mofo to him.
You know you are a permabear when from your 20th floor office you hear yourself say “If the market is up again today, I’m jumping out a friggin window”.