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The Most Ridiculous Justification For Why Stocks Will End The Year Higher You Will Ever Read
If the following surreal justification for why the market is not behaving as a typical Wall Street lemming would like it to behave, does not have the impact of an immediate and surgery-free lobotomy, nothing will.
From UBS' Jonathan Golub:
Stocks Decline Every Year
Just a further decline of eight points, and the S&P 500 will be down for the year. That pattern would be unnerving but not unusual. From 1991 through 2010, the mean annual price performance of the S&P 500 was +8.7% and the median was +10.9%. But the change from the starting price to the lowest price of the year averaged -10.4%, with a median decline of 5.5%. Even in the fourteen years when stocks were up for the year, the decline from start to low-point averaged 5.3% (median: -4.4%). Based on historical norms, if the current downtrend were to continue, taking the S&P 500 to around 1195, that would not be inconsistent with stocks closing higher for the year.
Keep rereading the above until blood shoots out of your eye sockets please.
h/t Louis
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Now if only I could get Mom to read me this fairy tale all would be right in the world.
Sleep tight and don't let the bed bugs bite.
The interesting thing is that if anyone should come up with a solidly reasoned view on why equities should go up from here to the end of the year ... it would be slammed regardless, given the meme of the site.
Just saying. I have no axe to grind at all, since I own no equities. Waiting for the fat pitch in whatever the asset class is...
While there are always the perma whatever here on ZH I suspect you are somewhat wrong. I've seen well reasoned arguments contrary to the overall meme presented here on ZH that were well received and stimulated conversation as well as rotten tomatoes.
In addition, to presume that the comment section represents the ZH readership is a serious mistake. By my estimates less than 20% of the readership actually leaves comments. We, kind sir, are the vocal minority rabble here on ZH.
At last, I am part of a minority rabble. Not sure whether to celebrate or riot. Perhaps I'll do both...
The best of both worlds. A celebratory riot.
#Winning
:>)
They will beat everyone with their Guichi (sp?) bags' and throw their Birkenstocks' at us.
Nominal Returns
The rate of return on an investment without adjustment for inflation. While nominal return is useful in comparing the returns from different investments, it can be a very misleading indication of true investor earnings on an investment. Compare real return.I haven't been able to find it, but Shiller *I think* did an exquisite takedown of Jeremy Siegel's claims on historical return on equities, and basically proved that returns are around 2.2% once survivorship bias & the incredibly scandalous re-jiggering of which companies are weighted for index exchange purposes, are taken into account.
At this time, the nominal 10 year total return on the S&P 500 is 4.69%.
The real annualized 10 year return on the S&P 500 has got to be negative, or close to it.
Absolutely no doubt whatsoever.
But that understates it.
What % of equity "investors" were wiped out, whether by 40%, 80% or more, in the last decade?
The bell curve tells us - proves - that the bulk of retail accumulation happens near or at highs, and distribution happens at or near lows.
There are millions of "investors," who probably comprise a statistically significant share of those who invested for the long term 10, 15, or 20 years ago, who lost a ton of money in equities, but whom are not counted in stats such as Siegel's 'historical average annual return' bullshit/spiel, because they cut their massive losses, stopped their bleeding out at some disastrous point, and stayed away.
The whole return on equities Ponzi is a very sophisticated scam, that massively distorts statistics in order to overemphasize positive data points, underemphasize (to the point of elimination, in some cases) negative data points, so that the industry and scam can be marketed with a straight face by 'professionals.'
CD-- tooo funny!!! This dumb ass has no clue WTF is going on!!! Another know-it-all anal-cyst trying to make a name for himself. Thanks for the laugh chief Golub !!!!!
You dear sir insult anal cysts everywhere with your derogatory comments. They have feelings as well.
THANKS!! I love to insult anal-cysts and remove them slowly....
As long as they are your own.....remove away. :>)
But keep your hands to yourself. I have a symbiotic relationship with mine. I feed them and in return they refrain from being a pain in the ass.
Bizzaro world...
So wait.... You mean Past Performance IS a guarantee of future performance? Everything i learned in school and 10 years of work experience was a Lie!!!!!
People working in banks or running for a polical office both have a (pharanoic) financial interest in not telling the truth.
Thus why pay attention? Everybody is corruptible.
When Papandreou or Bernanke say that there's a "recovery", they do not mean it seriously, because they don't have a sub 110 IQ. It's just that someone at JP Morgan promised them a high-pay job or a compensation in the future for that.
Oh Hamy-what happened to you? How can you doubt Dr. Bernanke and Hnr.Papandreous? They are working round-the-clock to save us small investors.
I got enough of trolling. It was an amusing ride, though.
Tipping point!!
Damn.
C'mon hamy don't quit now. I LOL'ed so many times with your posts, they were funnier than hell. You have a gift at trolling, please post a good one from time to time
Alarm! Alarm! Not cool Hamy, go back to your old self, i found it highly entertaining!
@ Hamy-I liked you better when you just trolled. When you try to make sense, you sound even dumber.
And you are a retard loser who lost all his savings shorting the DOW after March 2009. I can understand why you hate me and Robot. Seriously dude, stop sounding so embittered.
Obama Beats Weiner!
Hamy Gives Up!
When you try to make sense, you sound even dumber....
Isn't that the truth!
If someone makes a reasonable post, but if it falls outside the ZH echo chamber, all the doomer lemmings come out and say, that doesn't make any sense!
LOL
Nothing makes sense if you haven't seen the ball since kickoff, and you're facing the wrong direction.
derp
Sell side's biz model only works market goes up.
Hence why sell side strategists/economists have all predicated markets to end higher every year for the last 10. In reality markets have done nothing, and USD has lost 45% of its value.
For being wrong, the sell side strategists are all millionaires, many times over. One goes from being president of ones fraternity, to being a sell side strategist or a congressman.
I can't be sure...but it has something to do with other people's money, right?
And then, of course, there's churning for commissions (like bobbing for apples, only better), and then that 2/20 or 4/40 thing, which is all about floors of compensation even during bloodbaths taken as a result of criminally incompetent 'advice.'
In the great business of sell-side fraud street, you just can't lose, no matter what, as long as you're not gambling with your own money!
It's all about the "AUM".
And Assets Under Management = Other Peoples' Money.
The best way to get their paws on more Other Peoples' Money is to promise "big returns". The only problem is that The Other Peoples' Money isn't paying attention any more. Hence the need to make even more outlandish and preposterous predictions.
Truly pathetic.
But they are greedy sociopaths with no sense of shame or decency, so it will continue until they ARE FORCED to stop.
But Tyler, I don't want blood to shoot out of my eye sockets...and it is too early to start drinking, too...I think.
Never too early to start drinking!
Weapon of choice?
An extra dry, vodka martini, of course. And yes, it IS too early for those.
Nice. Similarly, I stick with the poorer cousin, Vodka T, but the premium vodka balances it out.
My dear friend to the North, the Vodka Tonic is the poorer cousin to no beverage! Vodka Martini, ha...I see their olives and I raise them two limes!
YES! Limes, added in a very manly and calculated fashion, are quite the addition to that fine fine beverage of ours.
Ive got a tumbler of Grey Goose with a bit of ice right by my side. Its always cocktail hour somewhere.
-Churchill knew the meaning of "dry" martini : drink a full glass of Gin whilst looking at an unopened bottle of Vermouth.
Simply epic.
Just beer here, thanks.
'just' beer? Let Ms. Bavaria teach you some manners...
http://static.zoonar.com/img/www_repository3/88/1d/89/10_43bde459869b389...
Grain alcohol enema. Gotta keep the hands free. :>)
Ouch...followed immediately by the "sweet release."
I think you need to change your weapon of choice, brother Cog. We are going to need you around once Wall Street puts the finishing touches on today's episode of Making Everything Worse Than It Has To Be. The hit rate on your essays about Sheeple psychology are about to spike.
My ego is suddenly awake and paying attention.
I always try to remember the Golden Rule when it comes to human psychology and the ego.
It can and will always get worse than you can imagine. Just give it time and plenty of rope. :>)
King Lear approves this message.
Haha, just because it's unthinkable doesn't mean it's not true.
LOL - hands free for sexting no doubt - still, sounds an excellent tonic
ZH needs some extra buttons for praise, besides “reply” and “junk” and while they’re at it, a way to open up links in a new window so I don’t have to keep backing and filling to look at linked material.
Haha... thats too much.
its not drinkin alone when the TV is on....
Marge: "Homer, do you drink alone?"
Homer: "Does God count?"
"Alcohol, the cause of and solution to all life's problems." Homer.
So many great quotes.
Pitchers of thick, frosty, and very purple mulberry daiquiris made with fresh mulberries from my yard and fresh lime juice. Fucking yum! :D
Good Italian red wine. Can be consumed in large quantities (if you can afford it) throughout the day starting at lunch time.
I am looking forward to opening a 2006 La Braccesca Syrah Cortona in about an hour or so ;p
I agree. I'm nearly half finished with this fine vintage.
If money gets tight (the La Braccesca is $40/btl) that would do!
Mad Dog!!! takes me back...
Unfortunately I'm still there.
Ah c'mon, what's wrong with the domestic stuff? I've been enjoyin it for years. Franzia, Carlos Rossi, Gallo, Bronco's finest. California nectar, "the quality will surprise you".
I hear the 2010 was a great year for MD lemon-lime and crystal meth made from Auto-Zone battery Acid. Particularly good sulfer harvest that spring...
Sounds great - not my first choice in terms of wine. But yes id probably go for Italian or French from the Rhones region. Granted, i have yet to try some Chateau Lafite 1982.
Italian wines (the really good stuff) are tremendous bargains compared to the Bordeaux first growths and Grand Cru Burgundies - which are superb but astronomically expensive. Try a good 2004 Brunello or Barolo (about $50-$60/btl) and you will be a believer!
You are right about the French Rhone wines. There are excellent values to be found throughout Rhone and Languedoc.
Santé!
you do realise that by drinking that your giving money to the Rothschilds...???
Screw the booze and let's go straight for the cocaine. Good times are here to stay and equities are burning a hole in the roof. UBS sez so.
What?
No hookers? You're not living up to your ID.
Good point. I'll throw in some hookers in case someone's Weiner gets a Boehner from all the coke.
Now thats quality
.
What will be unnerving is when the 401(k)/Retirement Plan/Pension Plan prisoners (yes, they are prisoners, as recent Amerikan Administration confiscatory actions have demonstrated amply) look at their statements a year from now.
Keep rereading the above until blood shoots out of your eye sockets please.
2007 mentality all over again
Why doesn't ZeroHedge report on the Washington Mutual Bankruptcy?
It's one for the ages and odd results are bound to occur.
Is ZeroHedge adhering to the absurd nearly complete Media Blackout of the proceedings? Well one's that would put The House of Hose'm in a bad light?
What's to report beyond the fact that it is a clusterfuck and people that bought the stock were wiped out and need to accept that. Don't gamble if you cannot handle losses.
Is this really that shocking, Tyler?
Up is down, black is white, left is right, etc. Bad data means the next data will come in better than expectations. Bad data also means more QE. Bad data can only mean the next data will surely be good. Truth is treason.
Not sure if much higher, but more likely above 12k on DOW.
I'm betting on it.
And thats ALL it is, a degenerate gambler bet.
And thats ALL it is, a degenerate gambler bet.
Way to sum up a profession. Whoops....I'll be looking for you by December, interesting
to know, what you going to say then. We only 40 points
below 12k by the away, if you notice. Worse month
for stocks - September, then we gonna see some action.
Ohh and if QE3 shows up, them we might even see 13500
or so. Let's talk then.
But when you sell your stocks, you won't be able to buy a cup of coffee with the proceeds.
Keep a-chasing that monopoly money. They're not making any mo... Oh wait.
Found you, Greeny.
http://www.youtube.com/watch?v=WOoUVeyaY_8&playnext=1&list=PL2B652FB5AD6...
Wrong, there is only one Greeny.
http://www.youtube.com/watch?v=0yq-Fw7C26Y
please go ALL IN on that bet. I mean bet EVERYTHING! the house, savings, a kidney...EVERYTHING...and let us know how it goes. We love a good laugh.
I'm, buying good quality companies with world-wide exposure
with Divi, enjoy your 0% saving rate.
buy more. sell the house, sell a kidney, sell the car and buy more. go long long long...you'll do just GREAT! LOL!!!!!
Look at the ewz etf
I hear CAT is going to assemble in Thailand (as if they would pass on any savings in Labour)
I brought a Whirpool front loader made in Germany to American design with $35/hr +bennys german hands
Good quality companies should never bite the hand that made them a world wide name.
Those hands were American, who paid the taxes that afforded them the breaks to make them great.
I sold - it just makes me sick to see a working man screwed down on wages then completely abandoned for a "Cheaper cost imput nation".
Ask Ireland what it feels like to be screwed without pity then bumped into a dumpster of debt when that preety little asian thang made eyes at them calling "we love you long time"
Multi nationals - a pox on them all.
Remember something Greeny. Return of capital trumps return on capital in any high stakes game.
pearls to pigs really
Remember, Obama is the anti-christ for suggesting that America isn't exceptional but it's "just business" to pass over every last one of those exceptional Americans for cheap foreign labor and its inferior results. Then these poster boys for cognitive disonnance go on to ask how a gun owner can also be a "liberal" and I feel like a sane stranger in a nation of madmen.
And I've shorted good quality companies with worldwide exposure. Up about 100% on the shorts so far, already in the money and they're due in sept, but the final word hasn't been said, so we'll have to wait and see.
Then your lucky.
The market is supported by an ever increasing pool of fiat that must grow (inflate) every year or it folds in on itself.
The smart money goes long because thats the bankers secret rule.
In the end, it will be obvious that even if you die with all the toys, that your still very dead
The more relevant point is what the odds are of dying before the debt accumulated to procure the toys is sought to be repaid, as a function of defaulting, prior to the time of death.
For those who are on an accumulate with dry, ready powder basis, rather than debt, there's no problem, however.
I won't even touch upon margin and leverage in this context, as it only warps the outcomes to points of absurdity.
cargo cult
Lol, good one, yeah let's behave like people do when things are great and the money will come.
May as well have just said 'Stocks will end higher, just 'cuz'.
In reality, the DOW will be lucky to be sitting at 10,000 by year end.
And these idiots get paid how much? What a pathetic excuse for a human being.
WTF?
Wow! This lacks any coherent argument and evidence. This has to be the weakest argument this side of Harry Wanger. In fact, I think Harry Wanger works at UBS. Jon must be Harry's MD
When's the last time Harry Wanger posted?
Abby Cohen may have to sue UBS for stealing her idea. Or is her idea just that stocks should always be 10% higher than they are?
it's a man baby
Abby Joseph Cohen is one of the few to have told heavily equity exposed clients she easily sees S&P 2100 by 2008 back in 2007, and would have big enough balls to still be calling them, telling them how much money they made in the last 24 months.
The sad part is that when billions of his client's money is at stake, all the UBS's million buck analyst can offer is 'historical pattern' and silly logic. If that was what his client need, may be they should find someone from local high school and pay her minimum wage for her extra curricular work.
The gold to S&P ratio will be 2:1 by Xmas.
It better not.
I'm not done buying yet.
So this guy discounts a totaly different world in which stocks are only supported at all by a FED money printing machine, and instead just averages prior years and makes a projection based on that? Most worthless BS Ive ever seen.
A normalcy bias display by the monetary controllers. Nice.
I think CS/DB had the worst justifications this week. Calling a correction healthy is a great way to say, wow we really missed this one but we still are reiterating 1450 Y/E. Don't worry about that.
Reminds me of the Cramer episode when he rationalized that if a stock hit's $80 then it will go to $120. Unbelievable. Why don't we just bust out the Tarot cards and call it a day.
Sixth card "Wheel of Fortune"
Tenth card "Tower"
Stupid EUR. Just get it to even.
I dont trust the euro enough to trade it. Buy hong kong currency and wait for parity with the chinese yuan, rmb, whatever you want to call it.
May have worked in an economy that has been levering up. But now we are destroying leverage. I'll short on any strength.
I think I sprained my eyeball reading that!!!
Hey, isn't that Harvey Golub's drunken night with Mrs. Golub? Gotta love nepotism on the Street. This guy has been falling upward for years.
The only way to win in this market is to trade exactly against any form of logic. Financials will rise, Gold will fall (Gold should really be at $5000 oz. by now)-and to make sure of his re-election Obama will force the markets up to new high's. It makes no sense, but we must go against our educated, logical instincts; ZH has been calling for a collapse for years-and that should have happened by now, except it has not. Believe it or not, the Dow could see 14,000 by election time-it's the only card they can produce as evidence of a 'Recovered' economy.
I couldn't agree with you more
unfathomably and unfortunately
EWZ has a dividend yield of 3.78 percent. I give it a five troll rating.
Brazil looks good in debt statistics and there is a lot of room for large levels of government spending increases heading into the olympics. In my long term money I will buy it all the way down as far as it goes.
Another Brazilian stock is SID yield 5.5%
Steel company, at PE just little over 10, but been
in downtrend.. Wait for $10 at worse case. Now at
$12.30, Good luck with your EWZ, bro.
nice thought-thanks
There is nothing wrong with reading tea leaves for entertainment. But, if you really want to know what's going on, it helps to look out the window once in a while.
Doesn't one need a brain to have a lobotomy?
the local tv news reporter lives next to my kids school. they live in a nice home . a mercedes and a land rover both new. a condo in the carribe and are known to frequent all the right parties. i tell my kid that she does not tell the news she hides it and thats why she is so well paid. i find it hard to believe that she is too stupid to know the real state of the world and what is going on. she is a teleprompter. if she does understand what is going on and attempted to go with it on air she would be on medical leave the next day i guess.
thanks zero hedge.
Moving to the insane to justify why you should let UBS steal your money.
Eradicate the bed bugs....they always bite.
Buy the f'ing dip, DUH!
well we have hit the top of the middle channel today, and if they follow the speed line and s and p at 1253 that gives us the top figure they are quoting for the year. we'd hit the speed line on the 28th. we are also in a tighter and tighter descending triangle, and today we have touched multiple basses on descending channels.
don't forget we have earnings next month and by earnings we may be oversold. that's my take.
Thanks, all you sukkers buying EUR! Just made my day.
This guy is sane compared to Altdoucher.
Hahahaha, spoken like a true insolvent wall streeter-- surely analysis like this deserves the $million + in bonuses.
They've done a good job figuring out how to game the system i.e. buyout and selloff the democratic process in this country in order to benefit their bottom line, but when it comes to actual finance it's pretty pathetic.
The best thing about drinking vodka "neat," particularly for one who like myself eats no breakfast or lunch, is that only the first drink needs to be a premium vodka.
Monopolowa - then Kamchatka.
Now that the banksters are creating ' Living Wills ' we gots nuthin' to worry about. Weil has a good time with the Dodd-Frank delusion.
http://www.bloomberg.com/news/2011-06-16/too-big-to-fail-ends-with-wave-of-a-magic-wand-jonathan-weil.html
I'm not sure this is the worst argument...I mean I saw one analyst claim that stocks will go up because the business cycle is 6 years so the next crash isn't due until 2014.
UBS must be flush with cash. Why else would the former popcorn vendor at the Cineplex be working there.
saw an ANAList on TV last nite, said he liked the market, of course, said they were recommending XYZ (forgot the actual name but the numbers ARE right), said they were bullish blah blah blah, said the stock was at $22.50 had a strong buy and would accumulate down to $18-$20 than expect the stock to go to mid/hi $20's. I said...wait,, U like the stock but would buy as it dropped over 20%!!! to maybe have it go to $25, a net 10% gain...wow, hate to see what's on the "hold" list...that's what you get now, a BUY is going DOWN 20%
1991?
Wow, plumbing the depths of time and economic conditions there.
Any analysis in this context which doesn't use the maximum time frame possible suffers from a fatal sampling flaw; but UBS wants you to invest in equities so sensible honest research is replaced with gristle posing as tenderloin.
Why am I having visions of midgets and puppy dogs playing together in a field of grass, with children flying kites in the background running through my head right now?
Because the drugs are finally kicking in. I told you to crush them up and snort them, not swallow them. Get with the program.
My mommy always said there were no monsters - no real ones. But there are.
Why do they tell little kids that?
Reefer madness, no doubt.
Hi Tyler, why don't you just open a thread for "The Greatest Shits" competition where shits like this will be pasted?
Then we'll vote before Christmas and have a winner for the year