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John Hussman Rips Apart CNBC
Today's letter by John Hussman is as insightful as ever, yet what caught our eye is one of the most lyrical and gorgeous Crucifixions ever performed of Wall Street's favorite mouthpiece, CNBC, and specifically,its most vocal anchor: one James Cramer.
From the full letter (must read)
Can we rely on investor myopia?
Over the past decade, it has been an uncomfortable lesson to accept that investors can be relied on
to behave in ways that are ultimately unsustainable and destructive to
their wealth, as long as market internals are temporarily supportive.
It's one thing to say, "From every historical precedent, we know that
this is going to end badly, and investors will lose a great deal of
their wealth, but for now, they are speculating anyway." It's another
thing to add, "and since they are, we are actually going to rely on investors to continue behaving dangerously, and join
them." Even though we've substantially outperformed the S&P 500
with smaller periodic losses over complete market cycles, there is no
denying that periodicaly riding the coattails of speculators, so to
speak, would have made our margin of outperformance even greater.
It's
unlikely, given the seriousness I place in being a fiduciary to
shareholders (in some cases to their life savings), that I'll ever
completely submit to the idea of relying on the speculative impulses of
investors, but I do recognize that we can probably accept a greater
level of speculative risk going forward than we were willing to adopt
coming off of a valuation bubble and a credit crisis with a latent
second-leg still looming. I expect that clarity about the underlying
economic conditions here will be helpful in striking that balance.
In
post-war data, subtle deterioration in various measures of market
action has generally provided an indication that investors are becoming
more skittish toward risk. But what if investors change their behavior,
and finally learn to stop ignoring pertinent risks (which, as we've
seen over the past decade, ultimately translate into actual losses)?
How would we know that riding the coattails of speculators was now a
dangerous approach?
I've thought about
this a great deal, and I suspect that just as the experience of
patients is determined by the quality of information they get from
their doctors, the behavior of investors is likely to be only as sound
as the quality of the discourse and advice they receive from investment
professionals. In reflecting on why the past 15 years have been so
riddled by irresponsible speculation, it is impossible to ignore the
rise over that same period of widely-viewed financial programming that
is equally riddled with cartoonish content that encourages short-term
thinking and speculation (buy-buy-buy! sell-sell-sell! boo-yah!). When
we observe a clear change in the quality of analysis on the financial
news, and the departure of its more speculative elements, I suspect
we'll also see greater emphasis on fundamentals and better allocation
of capital, while speculation will be less effective in the face of
overvaluation.
During the late-1990's
bubble, it struck me that the discourse on CNBC was remarkably similar
to the sort of discourse that I had read from news archives preceding
the 1929 crash. As I wrote at the time, what was surprising was the
extent to which investment professionals, who ought to have known
better, were fully endorsing valuations that were clearly inconsistent
(at the time, and certainly in hindsight) with prospective cash flows -
even if one assumed that economic activity, earnings, and dividends
would achieve and sustain the highest growth rates ever observed in
history.
Many investment professionals
have developed a habit of forming expectations based on nothing more
than extrapolation of short-term trends in the data, even when those
extrapolations are inconsistent with market history or well-established
economic relationships. This was a key element in creating the housing
bubble - no price was too high and no bubble was recognized, because
all that mattered was that prices were rising. The focus of analysts on
the short-term ups and downs of economic and earnings reports has
become such a mainstay of financial news that it's not at all clear to
me that investors even recognize how devoid the current financial
discourse is of real analysis.
To analyze
a company or the market, you have to think carefully about the
long-term stream of cash flows that investors actually stand to
receive, and how they should be discounted to arrive at an appropriate
price. Instead, the only question today is whether earnings and
economic reports are delivering "surprises" versus what "the Street"
estimated the day before the data was released. The quality of
earnings, the cyclicality of profit margins, dilution from option and
stock grants, the implied total return reflected in the stock price,
the return on retained earnings, cost of entry, competitive structure,
market saturation, the potential for organic growth from reinvested
capital - all of those things matter over the long run. But
to watch a half hour of CNBC today is like watching an old episode of
Gomer Pyle ("Well, surprise, surprise, surprise!").
As Benjamin Graham and David Dodd wrote following the Great Depression (Security Analysis, 1934),
“The
'new-era' doctrine - that 'good' stocks (or 'blue chips') were sound
investments regardless of how high the price paid for them -- was at
bottom only a means for rationalizing under the title of 'investment'
the well-nigh universal capitulation to the gambling fever… Why did the
investing public turn its attention from dividends, from asset values,
and from earnings, to transfer it almost exclusively to the earnings trend?
The answer was, first, that the records of the past were proving an
undependable guide to investment; and secondly, that the rewards
offered by the future had become irresistibly alluring ... The notion
that the desirability of a common stock was entirely independent of its
prices seems incredibly absurd. Yet the new-era theory led directly to
this thesis.”
At the point we observe a
higher quality of discourse from financial professionals, I suspect
that the quality of investor behavior will follow. Without that, the
amplified effect of speculation we've seen in the past 15 years may
turn out to be an ugly but enduring feature of the investment
landscape. We'll adapt in any event. For now, I am still very concerned
about the potential for abrupt weakness and credit deterioration, but
the data over the coming months will help to resolve those concerns one
way or the other.
h/t Mike
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For now, I am still very concerned about the potential for abrupt weakness and credit deterioration, but the data over the coming months will help to resolve those concerns one way or the other.
The real data or the government data?
Government data is all that is reported. Select data that is. You'll go a long time before the terms U6 or M1 are discussed in the lame stream media. The negetive credit growth will never be discussed.
Basically, do your own homework.
Nikki, in Detroit.
I've always found Greenspan to be more offensive than Cramer. At least everybody knows that Cramer is a clown. Greenspan pretended to actually know something.
CNBC just SUCKS!! An Erin Burnett is a cross between Pinocchio and a Transgender
CNBC just SUCKS! and Erin Burnett is a cross between Pinocchio and a Transgender
Is this coming from 'Pamela Anderson 1990' or 'Pamela Anderson 2010'? It would be funnier from 'Pamela Anderson 2010'.
I resent your denigration of Erin Burnett! She is an emminently qualified market commentator, as evidenced by the following: http://girlsofcnbc.blogspot.com/
Maxim cover! She has officially "arrived" in tart land.
Hussman is my only one decision investment I have ever made. If I go before my wife, she is instructed to NEVER sell Hussman as long as he is alive.
When the data is fraudulent, what is one to do?
(Still waiting for mini-skirts to signal the end of the 'recession')
Sorry but I just can't resist.
"and specifically, its most vocal anchor: one James Cramer."
As in boat anchor?
"...one James Cramer."
Every Deck has its Joker.
Every Court has its Jester.
Every Village has its Idiot.
Every Nation has its Cheesy Used Subprime Mortgage Salesman.
One James Cramer.
For my response to this article, go to
http://www.cnbc.com/id/18724672/
and then hit the "punching bag," "machine gun," and "shotgun" buttons, followed by "flatline" and then "hallelujah."
i cracked the "whip" three times. now i'm ready for my evening date.
Wait what.
You can't rely on data, you have to use common sense.
But that's just the problem with common sense: It isn't!
According to Cramer in todays Sad Money episode, its not too late to jump into equities...after a 60% run-up from the last time he was telling all of us to sell, which was exactly 365 days ago.
Perfect indicator that its time to sell.
Cramer is the poster boy for euthanasia.
Put him down.
"... the last time [Cramer] was telling all of us to sell, which was exactly 365 days ago. ..."
Several months ago, Cramer was interviewed somewhere claiming he'd told all of us to "buy" last March, not sell.
In the same interview, he claimed to have told us to "sell" at the old highs and just before the crash.
He's just lookin' out for us!!
Which I thought was "strange" at the time because I could remember Cramer appearing on the Today Show at the 666 low screaming "SELL!! NOW!! IF YOU EVER WANT YOUR MONEY AGAIN!!" LOL.
I ain't a speculator ! I am the TRADER.
p.s. we all are traders now.
Some day the fed will raise rates and then it's "margin call gentlemen" and then the shtf and then it's dogs and cats sleeping together and then a great eathquake, tidal waves, the dead rising from their graves...
blah, blah, blah
What an amusing dejavu in this " new era" doctrine Hussman cites.....heard ad nauseum during the dot.com puff period. NASDAQ is still under 50% of top end valuation after a decade. Dow's next up....a return from the " new era " outer limits.
Dow and IWM are going to get smoked. Tyler's friends with the HFT computers have got to get tired of trading with each other at some point soon...
+1 to both of you.
rainman....cali really advertising heavily in print and radio to buy those 2 billion in bonds.....if that doesn't signal "stay away", nothing will.
I am wondering when Patterson will send his COS to investigate how Calli is making it happen for some pointers... Perhaps then New York will pass government by voter initiative so those evil citizen speculators can be blamed for his problems as well.
Totally disagree with you on this one. The HFTs are cold and emotionless creatures. They'll never get tired of trading.
But be ready for the day when Skynet revolts against its creators.
'one of the most lyrical and gorgeous Crucifixions ever performed'?
uh... not even close TD.
This one gets a wee bit closer...
http://www.thedailyshow.com/watch/mon-march-9-2009/in-cramer-we-trust
That's good.
my guess is you're packin' close to 8. Bet Cramer struggles to get 4.5 on good day.
Missed this one. Stewart is great.
I agree. Stewart or Colbert would make a great president for the US. I mean really, where do you see bigger balls than on those guys? Colbert at the Whitehouse Correspondent's dinner was one of the most amazing things I have ever seen. This administration is soaring! LOL
Yes, they have had to make some really tough decisions. Risking arrest and imprisonment like that was courageous.
In June of 2008 as the market rallied back close to it's former highs, I emailed the following to Joe Kernen: "CNBC's nonstop pumping of the equity markets, and the platform you provide for the bonus-hungry Wall Street hot money, has been a major disservice to the general investing public that you claim to serve."
His response: "Should I match you and 99 others up with the 100 e mails insisting we’re fear mongers and hyping every piece of bad news? Been like that now for 17 years… split right down the middle… Sorry you’ve apparently missed the move from 9k to 14000 but you need to look in the mirror to find someone to blame my friend"
CNBC will never become more responsible in their reporting. Eventually lack of credibility will drive them out of business, but til then we're stuck with the stock touts and booyah and the resultant destructive market cycles.
People should rember that for CNBC and any other source of financial advise, you get what you pay for it. With CNBC you're paying nothing - and that's what their advice is worth. Even the stuff you pay for is mostly crap.
You really can't blame them though. They've got 12 hours of programming to fill and ads to sell. Catering just to sophisticated market participants like zero hedge readers just isn't a big enough group to be a workable business model. So you draw in the suckers with Jim Cramer and Fast Money plus the reality tv tools by pitting the hosts and contributors against each other. As crappy as it is, they do seem to get the top tier interviews.
Yes, John is as insightful as ever, but he still can't trade worth shit. Ask me how I know? How about a $4K loss on a $200k investment that I sat on for over a year as he bloviated endlessly about policy errors that he somehow couldn't find a way to hedge against, much less profit from. However, I guess I should count myself lucky since that $4K loss would be >$10K today if I was still a Hussman bagholder. HSGFX -- never again.
4shzl,
I agree with you 100%. The guy has found a way to hedge himself into a zero or negative return. The theory sounds great and I can agree with the writings. He just cannot find a way to make it profitable.
Actually, my experience was worse than I made it sound. After being in the fund for two or three months and watching it rise around 5% on aggressive hedging, I watched in horror as Hussman "discovered value" in the market and lifted his hedges to take a significant net long position. This was September of 2008 -- oooh faaaaa. By the end of the year I was enjoying a drawdown of >$30K. This was not OPM, this was my money -- and I don't get philosophical about people losing my money. Hussman is dangerous precisely because he is insightful -- and because he's in love with the sound of his own voice. If you lose money because you listened to Cramer, you deserve it, baby. But guys like Hussman are whole different kind of trap. Caveat emptor to the tenth power.
Yeah returning over 7% a year for 10 years during a time when the S&P has returned 0% is really terrible...Only lost 9% in 2008. Oh my god, how awful...I bet you love Ken Heebner...still down 50% from the top...
Don'y you dare diss James Kramer -- he's the guy that believed in the NEW ECONOMY (no need for assets, amortization or real creation of any kind forevermore).
He's the guy he said to ignore that trivial subprime meltdown, nothing to be worried about.
Does he moonlight as an editor at Wired magazine, by any chance?
Yup, good ole Jim Kramer, my oooh my oooh my.....
well cramer made a hundred mil before he "retired" from the game. you can call him gomer if you want, but results are what matters. Does this help anyone to trust his prognostications? hardly. but what is important for the tribe is that they are the ones that get rich and for the rest of you, to get screwed. that is all that is important to them. Just look in the background of his show set. There is a picture of his hero, Vladimir Ilyich Lenin, aka Vladimir Ilyich Ulyanov. Does this speak volumes about his world view? I think it does. So how can this be? How can capitalism and communism exist side by side? Easy. When the tribal members are the ones that have all the money and are in control, then everything is just peachy. Just remeber the post over the weekend about Elizabeth Warren on the Charlie Rose show talking about integrity and honesty. She said that she and people like timmie had differing world views. What that means is that those who control this market could care less about honesty and are out to screw every person they can out of their hard earned money. You know why? Because they operate under different rules(at least in their own minds) than the rest of us. Case closed. She can't say that but i can.
Power corrupts; absolute power corrupts absolutely
in the country of africa, wild dogs hunt in packs. they attack larger animals who could fight them off if they attacked individually. right now we are being attacked. unless we learn who we are and what we can effectively do, then all is lost. its all in your mind. but your mind is not your own. you must understand this, in these last days.
You know what's really scary? The hyenas. Those things are huge and they can track prey by scent for hours. Africa is a quite a trip. If you camp in the bush and go 20 feet away from your camp site, there are lots of animals who would be very happy to eat you. You are the prey, baby.
CNBC thinks they're doing God's work in helping to prop up the current administration and in keep the markets from crashing.
What I've been noticing lately, on CNBC, which has also been been pointed out by William K. Black, is that the financial media has been trying to alter history.
It's as though there was no financial crisis and the banks really didn't need the bailouts in the first place as evidence by the banks paying back TARP w/ interest.
Of course, no one on CNBC seems to wonder how the banks got all this money, considering they're not lending.
To analyze a company or the market, you have to think carefully about the long-term stream of cash flows that investors actually stand to receive, and how they should be discounted to arrive at an appropriate price. Instead, the only question today is whether earnings and economic reports are delivering "surprises" versus what "the Street" estimated the day before the data was released. The quality of earnings, the cyclicality of profit margins, dilution from option and stock grants, the implied total return reflected in the stock price, the return on retained earnings, cost of entry, competitive structure, market saturation, the potential for organic growth from reinvested capital - all of those things matter over the long run. But to watch a half hour of CNBC today is like watching an old episode of Gomer Pyle ("Well, surprise, surprise, surprise!").
I love this quote. But the media is one part of a larger game orchestrated by the modern swindlers of finance.
Where's the Beef?
Nice mix of stuff in his letter.
The historical niceties where observed, and thank you Mr. Hussman for doing so. First the Cramer crucifixion (an easy target) then the reverence to Graham, who would undoubtly not recognize his beloved "market" and "value investing".
Then we get;
"For now, I am still very concerned about the potential for abrupt weakness and credit deterioration, but the data over the coming months will help to resolve those concerns one way or the other."
Which leaves one asking Okay, you have set the stage, and now elighten us? A person so fluent in historical trends and CNBC media mishaps, and this is all you have to say?
----------
Some points;
I think Mr. Hussman should really differentiate what he mean by "investors", and how these now stratified groups differ. If you are targeting the small investor, which Graham devoted a great deal of his time, then we really would be interested in this sub group's options and behavior with reagrds to equities. So please choose something specific, and relate it to "value investing" or "irrational exuberance", or some peice of information I can use. He obviously is looking at trends from his Fund perspective.
The historical stuff is fun, but we are not dealing with history moving forward. The stage is set for some very un-historical trends and I think you know this. You should really describe why your risk models do not work any more.
We know the choices available for the FED, given the Obama budget projects for the next 10 years (essentially no balanced budgets, and revenue projections (growth) un-achievable), are not good, and will not resolve themselves in the up coming months. The FED and questions concerning interest rates (Fed Funds) and the pressure to keep lending (mortgages) rates low, are also long term. Perhaps two years, unless there is a crisis.
Moving on;
"I am still very concerned about the potential for abrupt weakness"
Aparantly not concerned enough to tell investors (myself included, who want to be rational) what specific abrupt weakness you are talking about.
I read a mix of applying past trends to what we have today, and statements about volitility and waiting for the effects of stimulus to be pulled and its potential effects. Just tell me what you really are thinking. You have pointed them out, just connect the dots. Perhaps there is no historical trend, or market efficiency, or rational investor in an unrational market, to draw any real conclusions.
I know, its tough being a strategist when they change the market game and always control the dice.
Mark Beck
nice post
I don't know if this is good for CNBC, or bad for Peter Schiff, but he's now going to be a regular on Fast Money, twice a week. (Tues and Thurs, 5pm)
I keep hoping this faggot Cramer has a stroke on the air and suffers a horrible debilitating pain before dying
Firstly, you knew Jim Cramer's Mad Money producer used to oversee The Jerry Springer Show right?
Source: http://www.kiplinger.com/magazine/archives/2006/09/cramer.html
Secondly, but not to side track from Hussman's specific CNBC review, I have a few questions for you:
-> What would you want to see on CNBC that is not already broadcast (i.e. what's missing)?
-> Do you believe that such (non-Booyah!) content could actually generate enough (and the right kind of) eyeballs to make this better channel programming profitable for the content creator?
-> If it had to be a premium channel (like HBO) would you pay for it?
Have an opinion? Please share it.
(The above questioning relates to a TV channel or at least a video-only medium. Clearly the best sources of 'valuable' information is currently in text format (sites like ZH, books, etc.).)
Reflexivity:
-CNBC clearly has a much broader audience than it used to have 10-15 years ago. It follows that they have adjusted their content accordingly. It would be nice to see a channel aimed more at pros and/or a more sophisticated audience. Neither FOX Business or Bloomberg TV has really tried this approach and instead seems to go after CNBC's audience scraps.
-CNBC has way too much fluff and tries too hard to pin market action on specific events or data points when there is no way to attribute such to such.
-A CNBC alternative should have more debt market coverage and during non-market hours put together in-depth info/documentaries with college level (at least) content about different corners of the market that some people, even pros, may not know much about. I'm sure it was popular but 'Marijuana Inc.' just doesn't cut it.
-The 'Trader'Talk' debate type shows CNBC has are the best things they've come up with lately.
-Even with all it's many flaws and BS, CNBC is a better news source than anything else on TV. CNN may have more resources but CNBC's bottom-line business slant and comparatively smart and accomplished newscasters make breaking story coverage much more substantial (usually) then other regular TV news crap.
i think cramer's target is the young people, to wit his constantly going to college campuses and besides all you have to do is listen to his callers. most of them sound pretty young or at the oldest maybe 40 something. they don't care about the old ones. heck they already have them in the bag. they have to get these young suckers started off on the right foot and make sure they work their tails off and put all of that extra money in those silly bogus retirement schemes so that people like cramer can steal it easier than if you had it under your control. abortion started with roe v wade. after this time untold numbers of young people have been systematically destroyed by their own mothers and then the potential moms are told that it is their bodies and they have the right. therefore there are only so many gen x and gen y people around nowadays. so they have to work extra hard to get their money because there aren't as many suckers now to put the squeeze on. this is why social security is dying quickly. without as many workers in the system more money is going out than is coming in. does anyone want to talk about retirement possibilities? once upon a time, the stock market was the venue of the rich, who played and dabbled at stocks as a pastime since they had the money to lose and could afford it if one of their gambles didn't paid off. let us not be mistaken here shall we? the stock market is just legalized gambling plain and simple. but one fine day a while back, some smart ass got the idea to let all of the baby boomer retirement funds get involved in the game. everything worked pretty good except maybe for Oct 1987 and 1998 and finally , 2008. but the shine is off the pumpkin now. for all of you gen x and gen y folks out there, you had better start really, really thinking about what is going on. this is not the 90's again, nor is it the 2000's.......the party is over folks. the bill is due. now what to do about it? that is the question.
Reflexivity:
-One more thing...yeah, a cable channel of Business news geared to pros and a more sophisticated audience that actually delivered would be favored by that demo and trading floors etc. would pay for it and probably others as well. CNBC would still be a must see only to the extent that big name guests deliver market moving news - which a'int no small thing.
And what would a business news channel geared to pros and a more sophisticated audience look like? Big name guests? market moving news? Too funny.
The new channel shouldn't (and wouldn't) be opposed to big-time gusts it's just that they might not be able to get them if their audience isn't big enough. They could separate themselves from CNBC by being a little tougher on those VIPs and having more Zero-Hedge type content in general. Lots of pros read this site and lots of pros would watch a news channel more like it.
Not that the ZH team (Tyler, et. al.) needs or wants any strategy feedback, but...
zerohedge.tv domain name is currently available!
Any chance the ZH team would be interested in producing original video content any time soon?
Any ZH readers interested in video content?
I would rather see someone with integrity who could also be amusing and captivating. That someone like Mr. Booyah is front and center, who earned his casino winnings by cheating, gaming the market/media and by naked shorting via his Hedge fund---is an an atrocious, hideous testament to our corrupt system.
So you heard that too? I mean, about Cramer being part of a vicious naked short gang with good media contacts to drive the "target" down? Spectacularly ugly individual he is.
Let's face it, the TRUTH just isn't very entertaining and doesn't contribute to ratings.
BS. The truth allowed Bloomberg to take 50% of CNBC's audience over the past two decades. Now, Mayor Bloomberg demands the same that Imelt does - so it's zero sum. However, the audience eventually sees through the shit. Look at 60 Minutes. Nobody under 40 even watches that shit anymore.
How can you say such bad things about 60 Minutes? Where else will you find GREAT stories like:
"Barney Frank: The Smartest Guy in Congress"
(http://www.youtube.com/watch?v=W2dQ-n8L2Y0)
It's such a shame. Cramer is obviously a smart and capable guy with a great hedge fund record. Back in the early days of TSC, before he was a TV regular, his rapid-fire market posts were great insights into market action. Not unlike what Zero-Hedge and other sites are now but equity focused and in an era when there was no one else doing that kind of thing.
Cramer is Tyler Durden's grandfather like it or not.
But Cramer's do-gooder conscious drives him to "help the little guy" and every thing he has tried after the early TSC days just becomes worse and worse. I don't care who you are, no one can bark out "buy!" - "sell!" in an unscripted "lightning round" and not get burned badly. It's just not possible.
He's such an ass-clown now and it's so unnecessary. Go back to running a fund Jimmy and give the profits away if you want but cut the crap already.
This is a great comment. I couldn't agree with you more.
+10,000
But keep in mind that Cramer made all of his hedge fund money during the greatest bull market in history. My father in-law doesn't know investing from taking a crap and he made a ton of money too during the 90's. I would be a lot more impressed with him if he had made his 100 million in the 2000-2010 timeframe.
Actually he originally made a name for himself by moving his new fund into all cash a day or two before the '87 crash.
"Cramer is Tyler Durden's grandfather like it or not."
Maybe in the same way The Emperor is Luke SkyWalker's grandfather (he's really not).
That was a metaphor there Jedi master.
CNBC-- The biggest bunch of bought and paid for Corporate shills the financial world has ever known...
They exist for one reason. To keep plying the masses with kool aid while their corporate masters funnel the cash right out the backdoor.
If you make the mistake of ever taking anything they say seriously, you are a flat out REEETARD.
I'm tired of everyone attempting to blame speculators. Actual problem: no one was responsible for risk - except the tax-payer of course.
Valuation is fundamental to the Graham-Dodd approach, but how can one arrive at a value and hence a margin of safety if the raw information in the financial statements is fraudulent? In the vernacular, I won't play a rigged game.
Reggie Middleton seems to be very value oriented in his analysis, I'm curious how he deals with all the misinformation.
With fake books and government selection of winners and losers, what they hell does the word "investing" mean?
There is no such thing. There is only Speculation. And Zule.
Boycott products sold on CNBC and email them to make a difference.
I'm a noob lurker, but I wanted to pipe up and say that I watch BNN:
http://www.bnn.ca/
Intelligent conversation and timely information, without any clowns whatsoever. No clowns.
IMHO, It's time for you guys to lose all these clowns, USA.
G. Gordon Liddy says BUY GOLD. It was a advert on Fox.
Do the Godlbugs believe in G. Gordon Liddy more than the Cramjob nutters believe in Crammer?
TRUE and FALSE...yes Cramer is over the top, a showman. I think his heart is in the right place, he is very intelligent, his stock picks, not so great, but without them there is no show. How bout some shorts Jim !! I do like CNBC and the guests, CNBC has been an education to me, after all, who better to understand and trade the market then listening to the chatter from the floor of the exchanges. Speculation, is just that, hopefully educated, but based on knowledge that could be false. Speculation is a function of capitalism and free markets, rational or not. Point taken Hussman, but since we are socialists, maybe our speculation and our self destruction should be focused elsewhere.....maybe Asia where free markets and capitalism rule the day !!
*** DON'T GET ANGRY, EMBRACE AND EXPLOIT ***
cant believe how many of you get so agitated about all this....thats why there's something called choice and a channel changer. Nothings ever going to be perfect or suit everyone, so just surf around and be selective.....hey, a broad cross section of diverse opinions isnt a bad starting point for using your own brain. Some of the more thoughtful contributors to ZH dont seem to be around as much these days.....hmmm
i understand moral hazard, but maybe now is the time we begin to share ideas and bring down the house(white).
cramer makes more selling books than he does in his "charitable trust". dont listen to any of his ramblings.
jim rogers ...marc faber
Listen Up, folks:
We have a pretty sophisticated group here. Most of us have moved way beyond the old "buy-and-fold-at-a-loss" school of investment pitched at us by assclowns like Cramer, Orman and your local broker.
It's time to grow up. If you have money, and you want it to work for you, you have to stand over it and make it work.
It's called hands-on management - meaning, you'll never get what you expect, you'll only get what you inspect.
Here at my organization we take ordinary matrosen (sailors) and teach them how to TRADE to augment their already too-poor earnings. I've got one guy, who in just the five weeks since his boat is in the yard has managed to run Rm10,000 to 36,000 using basic, proven methods that we taught him (and others) to research and organize for themselves.
It's a pity the DKM can't pay its good people enough - but young, single officers and sailors, can, with the proper education, tools and leadership, do well enough for themselves to make their service a worthwhile experience.
Oh, and BTW, we also preach Gold and other PM's as the place to salt their winnings away when they have to go out to sea again and close out their positions.
What they are doing you can do. If you can read, do simple mathematics, and have internet access, you can learn how to day or swing trade with reasonable risks and, at the end of the day, know that you made money from your money by the sweat of your own brow.
You see, way back in the day, when I was a young Oberfanrich zur See ( I believe the term in your navy is "Ensign"), I was escorted around the yacht basin at Kiel by a wealthy and powerful Broker who pointed out "the yachts of" ...his boss, the head of the Kommerzbank, the head of the Kreditanstaldt, the head of the stock exchange,etc. He was very proud and full of himself, and hinted that at the end of naval service, an enterprising young man like myself could do very well by signing up my fellow junior officers for brokerage accounts with promises of similar wealth.
"Well, perhaps" I said, "but I have one question ... where are your customer's yachts?"
End of conversation. And it hasn't changed since.
Bottom Line ... if you want to make money in the marketERRRcasino,you have to do it yourself. Be your own chartist, your own analyst, your own portfolio manager. And learn to trust your own judgment. And read ZH either on the internet or on the ship's bulletin board.
The rest is up to you.
KrvtKpt. Laughing Swordfish
submariner and financial educator.
Cramer is a joker, no doubt. But Liesman and Terranova are way worse. Fast money was watchable with Rattigan in charge. He used to have some decent guests like Fleckenstein and Gartman. Gartman is still on sometimes, but way less. Now you have to listen to Terranova recommend FCX right before it tanks 30% and never get called on it
I don't understand all the hate against Jim Cramer. Every trade needs the 'other side', so if you disagree with everything he says (while the masses lap it up) it just makes it easier for you to buy/sell where you want to :)
Paging the "Lou Dobbs Hedge Fund".
Is there a counter party fund to all of Cramer's picks?
Tthis is an excellent piece from Hussmann, and all you talk of is the idiot cramer ???
CNBC and other channels deliver drivel because that's what the mindless masses demand. The discourse and quality of the content will not change until viewers demand it. They demand it by stop providing their sanction (i.e., stop watching it). If viewers had the mental bandwidth to tune into high quality content, I suppose there would be a market big enough to support the advertising necessary to pay for content.
Cramers edge is the telephone. he calls the CEO of a company and they talk to him, you and i can't do that. yet the problem arises that the CEO knows he is on, its not like Cramer surprises him sitting on the crapper. so the boss gives you boilerplate.
i sometimes listen to conference calls, and i think i have a pretty good ear for what is going on, probably better than Cramers. on the conference calls at least the questions are well thought out, and not infomercial soft balls. Cramer has been duped a few times, doing these interviews. so what CEO is going on with him when he pounds them like a swiss steak? nobody. he could get snarky and piss everyone off, and do the angry investor thing, but his press would be even worse than it is now. people want to buy stocks. they don't ever want to sell. that's human nature.
Here's another analogy:
http://blog.mrnicegeek.com/2010/03/07/towel-over-treadmill-a-lesson-in-i...
I must admit that you perspective on the inherent risk in our markets is excellent...but I have to not shift looking for blame. Americans are funny, we look at the world as if it is always someone else's fault when we make a mistake or invest incorrectly...
Not so.
Also, there are plenty of people who go to the doctor and get great advice but do nothing...
Personal responsibility is the message here...and that is what is important. Jim Cramer or anyone else is just information and "noise", use it as you would use a chart or other information and do your own due diligence. Use stops...stay focused
Don't I wish that (over the years) I had always bet with Cramer. I've lost a few, I've won a bunch more. He's an excellent entertainer and a significant force in the financial world. No one person should ever be our Only source of buy/sell/hold. My money is still on Jim.
Folks, Hussman's point should be expanded. We currently have a full-on "pump the economic recovery" thingy going on from the highest echelons of Washington DC. The target is consumer and investor confidence. As those improve, more capable people will borrow money, improving the quality of bank assets, more people will invest in equities, improving the apparent wealth of the country. Seen through political eyes, economic recovery is entirely about imagery. And if they have to fudge data to create positive imagery, they'll fudge data (and have). So, yes, Cramer is a tool, but he is but one among a huge Snap-On inventory.
There is a modicum of truth in the view that economic recovery requires a positive view of the future. The real problem is that as long as lies and hyperbole are needed to create that imagery both the imagery and the economic recovery it supports are extremely vulnerable to the truth. I suspect that the attacks we are seeing on Econned is precisely because it exposes the truth - a very dangerous thing. Congrats Yves, you've alarmed just the right people.
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