You Know You are a Permabear When…

Last week, I referenced the terrific piece from Mike at Hedgfolios: (You Know You are a Permabull When…). This week, we have a little fun with the reverse of it:


You Know You are a Permabear When…

Each time the market rallies, you declare it an “unhealthy sign of speculative excess”

The great majority of chart patterns always appear to be either rallies in a bear market or an imminent major top.

CNBC asks you to appear as balance to the optimistic Bull guests.

Good economic results are bad for the market – it will cause the Fed to keep raising rates; bad economic results are bad for the market — its proof of the coming recession;

You worship at the alter of the holy trinity: Roach, Fleckenstein and Kass;

Sideways moves are actually just “setting up the market for the next down leg

You still rail against Nixon for taking the US off the gold standard;

Your colleagues think you should become a fixed income portfolio manager.

All the anecdotal evidence you see reveals excessive bullishness;

You have trouble sleeping when you take a long trade.

You refer to the 1987 crash, and the NASDAQ collapse of 2000, as "the good ‘ole days."   Bonus factoid: The LTCM debacle actually made you money.

You have a ready "tulip-bulb" joke to use at all times.

1. On days when gold prices drop, it’s due to a government conspiracy;
2. When gold prices rise, it’s because central banks have finally lost control of manipulating the gold market. Either that, or the masses have finally figured out their fiat currency is just paper.
3. If gold drops again the next day, see #1.

The move from Dow 7,000 to Dow 11,000 has “just been short covering”

When companies make quarterly earnings estimates, its bad because a) its already built it, and b) its evidence of earnings management. Missing earnings, on the other hand, is bad, because, well, its bad.

Your website links to Marc Faber (The Gloom, Boom & Doom Report), Grant’s Interest Rate Observer, and the Ludwig von Mises Institute

You criticize any analyst that upgrades a stock from “Strong Sell” to “Sell”

The Yield Curve Inversion is a sure sign of the coming recession; As the inversion flattens, however, you note out how negative higher 10 Year Yields are for stocks;

Positive market commentary is evidence of “complacency” and proof that the market must go lower;

Any 10% rise in an stock is a “great shorting opportunity;”

You blame market rallies on ignorant bulls “who just don’t understand;”

The market is trading at 5 times earnings with a 5% yield — and you are calling for the “next leg down”

Strong economic data is proof that the BLS/BEA is politically fixed — weak economic data shows how much the economy is slowing;

You short anything that is in your parents’ retirement portfolio – and are determined to outperform.

You insist that Robert Prechter is just misunderstood;


And the number one sign that you may be a perma-bear is:


The market declines to zero – and you’re still bearish.


Thanks to everyone who contributed to this ! 

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  1. Dblwyo commented on Mar 11

    Well I don’t about Prechter but I like Faber and Grant’s. And read Fleckenstein regularly though he gets carried away I mean out from time to time.

    Oh, btw, have also bookmarked your blog as well. Hmmm…


  2. B commented on Mar 11

    I think that describes the majority of posters on here. They’d complain if they won the lottery because of the taxes.

  3. Jay Walker commented on Mar 11

    Very funny Barry, enjoyed the piece. Keep up the good work.


  4. GRL commented on Mar 11

    Don’t forget that old technician’s standby:

    You know you’re a perma-bear when the chart always “shows that the market is in the down-leg of a head-and-shoulders top.”

  5. Eclectic commented on Mar 11

    You know you’re a perma-bear when you see a psychologist about it, and the psychologist shows you his latest mutual fund statement and laughs his ass off at you.

    Our economy is somewhat like a small city in which every citizen has a not-unlimited bank account balance but no job… or an insufficient one.

    Suppose you knew unequivocally (not suggesting I could, or do) that the bank balances would all run out simultaneously, all this coming, say, June 1st.

    It’s not hard to figure out what would happen then… but you’d never be able to convince the multitude of the city’s citizens of the reality that was coming… not until their bank accounts run dry.

    Consequently, if you went to your neighbor who’d invited the whole block to a spring party, on him, and wondered aloud to him why he couldn’t understand he was spending his family’s subsistence in coming months and years, he’d just laugh at you.

    Even more… if you approached him logically in a way that allowed him to picture the notion that you were right. That is; if you explain it in a way that should be beyond his capacity to deny it… he’ll STILL deny it, possibly even become angry.

    It’s because optimism is so strongly attached to the human spirit that it will suffer great logical assaults and never be made to surrender until it is forced to do so, by reality.

    Among all I read on a regular basis, Roach raises in me the greatest logical picture of a coming reality, but Roach is like the fellow who approaches his partying neighbor with concern.

    However, right now the neighbor, if he questions it, can get in his car and drive around the neighborhood and watch the construction going up, all the lots scrubbed clean and being staked-out for foundations, all the cars crammed into full parking lots of big boxes. He also turns on CNBC and FOX and listens to the administration… and for the most part all those sources have pronounced the economy fit and without the slightest possibility of deflation.

    So, who does the partying neighbor listen to?… our lovable curmudgeon?… Roach?

    Nope… he listens to his heart.

  6. muckdog commented on Mar 11

    Heee. Larry. Us. Sounds like the fellas over at Financial Sense.

  7. Fred commented on Mar 11

    You know you are a permabear when your tombstone says, “I told you so.”

  8. Eclectic commented on Mar 11

    Hey… this “you know you’re a blah blah blah yip yap” is getting boring.

    Can we talk about something else?

    Need an opinion.

    How confident can we be in the absolute content (bonafide assets represented) of ETFs?

    Not talking about the market value of the assets… I mean can we be confident, in a melt-down, that the assets represented to be there are there?

  9. Eclectic commented on Mar 11

    p.s. Muckdog:

    That gravestone thing is the best one yet!

  10. Eclectic commented on Mar 11

    Apologies to Fred:

    Sorry, Fred… the tombstone thing was yours, and it’s the best!

    BTW, Big Pic?… can’t you format the comments blocking any better?

  11. Leisa commented on Mar 11

    To Eclectic: I’ll disagree with your portrayal of Everyman (the neighbor) as being so optimistic that he doesn’t listen to and/or heed what some might think is the obvious, but rather listens to his heart. It’s not optimism but oblivion that is in operation. Personally, I don’t think that any of this economic stuff is “obvious.” I think that Everyman is so overwhelmed with raising a family and scratching out a living that he doesn’t have the time nor the energy to sift through the morass of conflicting information. Sites such as RM or CNBC has a bevy of “experts” with opinions running the continuum from perma-bear to perma-bull. I do not see a consensus of “all those sources have pronounced the economy fit and without the slightest possibility of deflation” that you note. For the most part, Everyman is not making active investing decisions. Their investment vehicle, if they have one given that the savings rate is so low, is their 401(k) plan, and s/he really doesn’t have a clue as to where to park the money. The real travesty is not all of the economic doom and gloom (which sadly I am subscribing to), but rather the economic and financial ignorance in which most average Americans operate.

  12. Eclectic commented on Mar 11

    Leisa… good points.

    As I’ve written here before, what you are speaking about is really akin to investing by proxy, because the masses have entrusted their capital into ETFs, money managers, mutual funds and unit trusts.

    They only understand if their statements go up or go down. Everything else is oblivion.

    However, if they ever get shocked enough, they’ll withdraw the proxies… as was the case in the collapse of investment companies (trusts) during and shortly after 1929. They’d become enigmas because of the multi-layered hocus pocus involved in their issuance, trading, backing, etc. This is why I’m asking the question: Can we trust ETFs? I don’t know the answer… can we?

    I bet you’d enjoy the book, “The Great Crash” the original book, or the more recent edition (date?). It’s by John Kenneth Galbraith.

    Much of what he described about those times… is being repeated today, in Eclectic’s most humble opinion.

  13. B commented on Mar 11

    That is in large part because of a few reasons. 1) Most Americans always historically had a retirement to count on, and thus, didn’t need to worry about “investments”. 2) Our “ownership” society has thrust individual’s retirement upon them. ie, You manage your own investments without many tools or education to cope. 3) Most financial advisors are clueless at best. 4) Wall Street wants to keep you fat, dumb and happy. Why? Because they make trillions of dollars on your money whether the market goes up or down. Advisory fees, mutual fund fees, etc. If you actually pulled your money out of the market during 2000 to 2003, Wall Street would have cumulatively lost hundreds of billions in revenue. Their standard response is that you cannot time the market. That’s total B.S. Especially since they have been fined by the SEC for timing their investments. Oh, and because their trading arms always time the markets.

    I’m sure there are differing opinions and other points but the reality is some flavor of the above. I feel sorry for most investors because investing is a stab in the dark. And truly understanding macro economics, global intermarket analysis and market analysis is a complicated topic few have the time or capacity to understand.

    I’m very bearish short term and will take what the market gives me in the future, but I am very bullish on the long term potential. That is, if the politicians don’t screw it up with more jingoism. My new favorite word. Our problems are real and not trivial but they have been as large or larger in past cycles.

  14. B commented on Mar 11

    I’m not sure I understand your point as to underlying assets in ETFs. There is no wizardry or shenanigans as it pertains to ETFs. It is very straight forward. It is literally no different than buying the underlying asset.

  15. cargo commented on Mar 11

    You know you are a Perma Bear when :-

    1) Many major world equity markets fall 30% to 60% and you still can’t buy.

    2) Many major world equity markets – and their earnings – start rising after 30% to 60% falls and you keep calling the rise a rally in a bear market.

    3) You can’t keep a consistent list of bearish/bullish factors throughout a full business cycle and, instead, continually jump to the most recent bearish number/argument as soon as a recently used number/argument turns bullish.

    4) The great majority of rising chart patterns appear to always be either rallies in a bear market or an imminent major top.

    5) A buying point is always somewhere in the future and never now.

    6) The amount of time you spend being bearish/concerned about stocks is completely disproportionate to the amount of time the stock market and earnings have actually been in decline over the last 100 years.

    7) You really think that Precious Metals are, over any rolling 10 year period, a reasonable alternative to the total return of a major broad stock market index.

    8) You have, personally, never found a good time to buy real shares in a real company during the last 10, 20, 30 or 40 years.
    If you did, you became very concerned not long after, and sold.

    9) You are fully accepting that all of the financially successful people you’ve ever met, plus the annual Rich Lists of the last 60 years, are chock full of people who are Perma Bulls on Stocks, Real Estate and enterprises they started.
    Indeed, you know of no one who ever created long term wealth by being an equity/real estate Perma Bear or hoarder of precious metals – and none of this bothers you in the slightest.

    10) The only Perma Bears you know who’ve done well are those that own Perma Bear/Precious Metals publications/advisories/brokerages – and you haven’t worked out that all their wealth comes from their enterprises; and not from being Perma Bears/precious metals hoarders.

    11) Lastly, as a long time Perma Bear on equities or real estate or the economy, your personal wealth after many years is well below that of your contemporaries. However, undaunted, you continue to believe that just around the corner is a financial accident which will make sense of years of personal wealth under performance as a Perma Bear.

  16. Eclectic commented on Mar 11

    B: I generally agree with you. It’s not the straight-forward concept of ETFs that I’m asking about.

    However, ‘literally’ is a very big word. Are you quite sure that you meant ‘literally?’

  17. Permabull commented on Mar 12

    Always amusing to see Steve Roach trotted out as a major bear. Since joining Morgan Stanley in 1982, it would be hard to believe he has accumulated any less than 500,000 to 1 million shares in MS.

    Looking at the latest MS filings on compensation, we can guess from other senior MS executive compensation (he isn’t personally named in the filings) that he’d be making at least USD 1 to 3 million a year – half of which is in stock/stock equivalents.

    Basically Mr. Roach will probably have become extremely wealthy on the back of substantial holdings in the most recession/bear market sensitive industry in the S&P.

    Interestingly, his accumulated wealth comes from being paid large amounts of money to scare the pants off his audience – at least in recent times.

    I’m all for it – Wes Craven did very well out of scaring people and, when you think about it for a moment, it is delicious irony that the Perma Bears who love Steve Roach’s musings have contributed greatly to his substantial stock market derived wealth.

    The Perma Bears need a hero who’s actually made a lot of money from being a Perma Bear, rather than talking about it or selling it to someone else.

    I’m sure he/she is out there. Any candidates?

  18. clement cormier commented on Mar 14

    even the turtle has to stick her neck out in order to cross the not forget brother Tice in the super bears.all these people should remember that nothing ventured nothing gained.what are these people going to do sit on their dollars and watch them progress into oblivion. let’s reason a little folks.

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