Via Doug Kass, comes this list of bad dope by the punditocracy, including analysts, strategists, and T-heads. These are a cautionary warnings not to blindly follow the cliches and heuristics so popular on Wall Street:
• Home prices will never fall (said repeatedly two years ago). Look out above, home prices are falling.
• Don’t fight the Fed (said repeatedly over the last several decades). Sometimes, like in the last nine months, it does pay to fight the Fed.
• The cash on the sidelines will provide fuel to a new bull market leg (always said). There is always tons of cash on the sidelines.
• Citigroup, at $53/share, is inexpensive at only 12x earnings (said last year repeatedly). Last sale? $26. Res ipsa loquitur.
• Bank stocks and government-sponsored agency stocks have strong dividend support (said last year repeatedly). Bank dividends have been slashed throughout the year. (Fannie Mae just cut its dividend.)
• The housing and credit crises are over (said frequently recently). The housing depression and the seized up credit markets remain problematic.
• As night follows day, the financial writedowns will become financial writeups over the course of time (said will regularity recently).
• Buy stocks in the long run (always said). Stock markets have historically gone through decade-long periods with no price appreciation.
What have you been hearing lately that sounds good, but is not quite right?
The Media’s Muddled Message
TheStreet.com, 05/06/08 – 11:59 AM EDT http://www.thestreet.com/_rms/s/kass-the-medias-muddled-message/newsanalysis/investing/10415304.html