You Ain't Got No Pancake Mix!!
A Naybob of Realty, not reality, and I really do thank you, once again for inspiring our Nattering...
sends me a listing for a 800sf 2/2 condo in SoCal priced just under $150K with the subject line: A Very Interesting Project/Price--Your Reaction???
My response was "We need more like this.... it's Deja Vu all over again, get your shorts ready... If you thought last time was bad, this time it will be 10 times worse... EVERYTHING gets hit."
Her response was titled: SO WHAT THE HECK?: We've Moved Into "Buy" Territory... attached was a link to a post from an unnamed analyst who we will paraphrase.
The analyst asks a good question: Did we just see the top and is it a good time to buy the dip? Then gives a simplistic answer. The majority of the time, it's best to buy a dip... long term trends, which are strongest, are most likely to continue. It's that simple.
The analyst utilized a single market sentiment indicator, his charts were from today's market; after a correction in 07; after the carnage in 08; and he went on to conclude:
Using the metric, we witnessed a pull back to a lower risk area, where stock prices might find some support and regain strength. - Ok, Usually. We have to assume this could shape up to be a good buying opportunity. - maybe, maybe not, and we assume nothing.
The Nattering One muses and responds to the Naybob of Realty as follows:
A yeah ha! Hallelujah! You Ain't Got No Pancake Mix!! Thanks, this is a nice indicator, I utilize similar metrics and will keep tabs on this one.
Unfortunately, this metric suffers from market lag as witnessed by the attached charts. In other words, the elephants have to clear out first, and this becomes evident after the fact.
Investor and advisor sentiment is only ONE of many indicators, and to hang your hat on one or two indicators is like putting all your baskets on top of one egg, no more Bushism's please!!! It's too Temptilatin'..
Let me give you an example of why its a bad idea to depend on only a few metrics. The same analyst observed two buy signals in crude oil and provided a chart.
The analyst concluded: No indicator has a perfect track record. How right you are. These two... indicators are telling us... crude could be making a profitable move. - could be, maybe, maybe not.
Here's what happened by August 20th:
Note the small blue triangle indicating the recommended entry point around July 24th which retraced up for a few days in a profitable move. What happened next?
Was this a BUY, BUY! or a classic BYE, BYE headfake? Had you depended on those two momentum indicators, and not paid attention to a multitude of others, you got pancaked, and without any pancake mix.
Now, nobody is perfect, and I most certainly am not. As I like to quote Fleck... "Often wrong, but never in doubt." And I don't hold myself out to be an expert, as I am anything but.
In fact, as I like to say, I'm alot like Schultzy, although I have conveniently forgotten more than most know, I know nothing.
And what I lack, I usually make up for in common sense. So in the blog-o-sphere, this makes me just one of usual suspects...
Now, hand me the keys and lets get back on track... in the past, on multiple occasions, similar metrics have been a leading contrarian indicator... let me explain.
In the next few days, I will have some posts up which utilize around forty (40) different indicators with charts gleaned from various sources.
You will observe with certain market sentiment metrics, when investor and advisor alike are bullish, and to such an extreme degree, as in today...
bullishness has never failed to peak just before each and every previous market crash, 29, 72, 87, 00, 08... it would behoove one to at least look out below.
But its not just market sentiment we are talking about... of the nearly forty (40) indicators, twelve (12) are open to interpretation either way, twenty eight (28) are less so, and all are near or at all time peak or trough readings.
Why is it different this time? And it always is... This is much more scary than last time, because, this time it won't be just housing & finance...
derivative unwinds, and a liquidity crisis that drag everyone else down, it's going to be everything across the board that collapses, no safe harbor or haven.
And this time, there is nothing the clowns in charge and the central bankers can do to stop it. The Sheriff cannot pull out the revolver and start shooting, as there are no bullets left.
ZIRP cannot be invoked, that card has been in play for far too long now and is in fact responsible for the mess we are in and the absolute disaster we may well soon witness.
In closing, I can only hope I am wrong, and for everybody's sake, I really do. I am standing by and waiting for the pancake mix.
And since you (Naybob of Realty) already know the answer to this, you have to ask yourself, was I wrong last time? or the time before?
Stay tuned, stay informed and keep your eyes peeled to the sky, as it could be a name brand, like Steinway or Aunt Jemima that pancakes you, without any pancake mix. Mmm, sho good.
sends me a listing for a 800sf 2/2 condo in SoCal priced just under $150K with the subject line: A Very Interesting Project/Price--Your Reaction???
My response was "We need more like this.... it's Deja Vu all over again, get your shorts ready... If you thought last time was bad, this time it will be 10 times worse... EVERYTHING gets hit."
Her response was titled: SO WHAT THE HECK?: We've Moved Into "Buy" Territory... attached was a link to a post from an unnamed analyst who we will paraphrase.
The analyst asks a good question: Did we just see the top and is it a good time to buy the dip? Then gives a simplistic answer. The majority of the time, it's best to buy a dip... long term trends, which are strongest, are most likely to continue. It's that simple.
The analyst utilized a single market sentiment indicator, his charts were from today's market; after a correction in 07; after the carnage in 08; and he went on to conclude:
Using the metric, we witnessed a pull back to a lower risk area, where stock prices might find some support and regain strength. - Ok, Usually. We have to assume this could shape up to be a good buying opportunity. - maybe, maybe not, and we assume nothing.
The Nattering One muses and responds to the Naybob of Realty as follows:
A yeah ha! Hallelujah! You Ain't Got No Pancake Mix!! Thanks, this is a nice indicator, I utilize similar metrics and will keep tabs on this one.
Unfortunately, this metric suffers from market lag as witnessed by the attached charts. In other words, the elephants have to clear out first, and this becomes evident after the fact.
Investor and advisor sentiment is only ONE of many indicators, and to hang your hat on one or two indicators is like putting all your baskets on top of one egg, no more Bushism's please!!! It's too Temptilatin'..
Let me give you an example of why its a bad idea to depend on only a few metrics. The same analyst observed two buy signals in crude oil and provided a chart.
The analyst concluded: No indicator has a perfect track record. How right you are. These two... indicators are telling us... crude could be making a profitable move. - could be, maybe, maybe not.
Here's what happened by August 20th:
Was this a BUY, BUY! or a classic BYE, BYE headfake? Had you depended on those two momentum indicators, and not paid attention to a multitude of others, you got pancaked, and without any pancake mix.
Now, nobody is perfect, and I most certainly am not. As I like to quote Fleck... "Often wrong, but never in doubt." And I don't hold myself out to be an expert, as I am anything but.
In fact, as I like to say, I'm alot like Schultzy, although I have conveniently forgotten more than most know, I know nothing.
And what I lack, I usually make up for in common sense. So in the blog-o-sphere, this makes me just one of usual suspects...
Now, hand me the keys and lets get back on track... in the past, on multiple occasions, similar metrics have been a leading contrarian indicator... let me explain.
In the next few days, I will have some posts up which utilize around forty (40) different indicators with charts gleaned from various sources.
You will observe with certain market sentiment metrics, when investor and advisor alike are bullish, and to such an extreme degree, as in today...
bullishness has never failed to peak just before each and every previous market crash, 29, 72, 87, 00, 08... it would behoove one to at least look out below.
But its not just market sentiment we are talking about... of the nearly forty (40) indicators, twelve (12) are open to interpretation either way, twenty eight (28) are less so, and all are near or at all time peak or trough readings.
Why is it different this time? And it always is... This is much more scary than last time, because, this time it won't be just housing & finance...
derivative unwinds, and a liquidity crisis that drag everyone else down, it's going to be everything across the board that collapses, no safe harbor or haven.
And this time, there is nothing the clowns in charge and the central bankers can do to stop it. The Sheriff cannot pull out the revolver and start shooting, as there are no bullets left.
ZIRP cannot be invoked, that card has been in play for far too long now and is in fact responsible for the mess we are in and the absolute disaster we may well soon witness.
In closing, I can only hope I am wrong, and for everybody's sake, I really do. I am standing by and waiting for the pancake mix.
And since you (Naybob of Realty) already know the answer to this, you have to ask yourself, was I wrong last time? or the time before?
Stay tuned, stay informed and keep your eyes peeled to the sky, as it could be a name brand, like Steinway or Aunt Jemima that pancakes you, without any pancake mix. Mmm, sho good.
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