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America's Back!
In our most recent Broyhill
Letter, we suggest that increased caution is prudent
given a number of leading indicators. The full letter is reproduced
below, but given this week’s excitement over positive quarterly earnings
reports, we thought we’d offer up some additional food for thought.
Last Friday was the first 90% Downside
Day since February, sentiment gauges are as bullish as they’ve been
since the “calm before the storm,”, the CBOE equity put/call ratio is at
extremes last seen in August of 2000, stocks are the most overbought
since the rally began in March 2009, we’ve gotten within spitting
distance of “The Lehman Gap,” volatility is back to complacent levels,
and by Jeffrey Saut’s count, last Thursday was session 34 in the “buying
stampede” that began on February 26th (rarely do such skeins last more
than 30 sessions).
Ned Davis recently referenced a study by
Paul Montgomery, which concluded that the market tends to move in the
direction of the “cover story” for about a month, but reverses and moves
contrary to the cover about 80% of the time over the next year.
Investors must remember that Magazine Covers are designed to sell
magazines. Cover stories capture current consensus sentiment. Some
recent examples of recent sentiment: Numbers Point to a Recovery;
Relax, We’ll be Fine; Dow 11,000 Is Only The Beginning; Hope At Last;
America’s Back; The Hot Hand; and our hands-down favorite, Double
Dip? Hell, No! They say a picture’s worth a thousand words, so we
encourage friends that might not be interested in reading our full
letter, to at least take a good look at the picture below!
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lbrecken - we couldn't agree more. But since our investors can only take so much of our rambling on an ongoing basis, we try to limit our letters to one theme at a time. Check out our Q4 letter (link below) where we review our deep concerns around the global delveraging process which has yet to begin.
http://www.scribd.com/doc/2671662 7/The-Broyhill-Letter-Q4-09
http://www.scribd.com/doc/26716627/The-Broyhill-Letter-Q4-09
America is doomed
http://www.silverbearcafe.com/private/04.10/sprott.html
Look at those statues behind Eric Sprott.
Is that an evil gnome gloating over a bar of gold?
Is that a human faced, four legged, scorpion tailed, demon creature being hoisted up in the air by two humans?
Wow great chart hehe :)
Tomorrow will be a funny day...
http://midasfinancialmarkets.blogspot.com/2010/04/it-was-not-bullish-mon...
What also amazes me is that reports like these do not even take into account where we are as a nation debt wise sovereign or not nor the vastly greater govt regulation over our economy and its subsequent realtive size to GDP. Further never in our history have we an administration who is this anti capitalistic. Lastly, sum result of a tax environment that will rival the 1960's/70's by 2011. Thus, if one takes these factors on top of Broyhill report you draw your own conclusions.
What is occurring here is what occured in 1999 where the media's spin on reality was different than what reality actually was. Currently, the media as well as most PM's, lead you to believing we are heading toward a self sustaining recovering in hopes of steming the fall of democrats come Nov. while the reality is that all the economic strength has been tied to govt stimulus both domestic and foreign. Unlike in 1999 the retail crowd sees the roose while PM's either dont see it or play along for now at least until EPS starts reflecting the non-recurring nature of stimulus. Either way the same result will occur as in 1999.....a falling stock market.
Goldman may be done but JPM and their "M"arket "M"anipulators have the derivatives.
'Merca, you ready to go to the moon?