Dennis Gartman Mocks Bill Ackman's "Demise"; Tries To Understand Bitcoin, Fails

Tyler Durden's picture

In an unexpected development, in his latest note the best market inflection point indicator alive, Dennis Gartman, has decided to pick on none other than billionaire Bill Ackman. This is the result:

We wish to talk once again about the incredible collapse of Valeant’s shares and the damage being wrought upon the reputation of those hedge fund managers still caught long of this company’s shares, with the leading example remaining the demise of the once sterling reputation of Mr. Bill Ackman of Pershing Square Capital. Here we have one of the true giants of the hedge fund industry; a gentleman once worth billions who ran billions more; a leader in the performance race for many years and now rather obviously a gentleman, who like Icarus of Greek mythology fame, flew too close to the sun and is now falling into oblivion.


Pershing Square’s assets are down 18.6% for the year as of the end of May we are told. We see no sense in being vindictive for there is nothing to be gained in being so; rather we wish simply to point out that the “Rules of Trade” are meant to be adhered to and that the “first among equal” of our rules of trading is the first: that one is never, ever, under any circumstance to average down into a trade. As our old friend, Paul Tudor Jones, says in this regard, “Losers average losers.”


When one averages down into a long position… or averages “up” into a short position… only one thing can be happening to the equity in one’s account: it must, by definition, be falling. If you buy a company’s stock at $25/share and it goes to $20/share, you are worth less than you were before. It cannot be otherwise. It is simple arithmetic. On the other hand, if you buy a company’s shares at $25/share and they go to $30/share your equity can only be larger. Why, we ask, would you wish for the former?


When a stock begins to fall there is no actual way of telling how far down it may fall before its weakness is stemmed. Enron’s shares fell relentlessly… inexorably… from $85/share to zero, and it was considered to be under-valued at every single penny lower as it fell. Buyers bought all the way down into bankruptcy. We watched as USAirways’ stock fell from $125/share all the way to zero, with some of the great minds in the business having owned it… and having bought it… all the way down into oblivion. We watched as sugar prices in the early 70’s fell from $1.25/lb. to $0.03/lb., with buyers all the way down, and over the past three decades we’ve watched as the coupon on the long bond here in the US has gone from 14.25% to where it is today in single digits.


The purpose for this exercise is to learn the lesson that Mr. Ackman is learning the very hardest of ways: that the market is wiser and larger and fiercer than are we. We are but small, imperiled cogs in a huge machine that can and will grind us into oblivion. The best that we can do is make certain that we have our trading positions in line with the market’s main trend; that we align ourselves with forces larger than are we and that we never, ever deviate from that intention. Mr. Ackman is heading toward investment oblivion. He is trapped in a trade that he cannot… and will not… get out of. His institutional clients will make the decision to get out for him as they demand that their remaining capital be returned and that as he raises that capital he is forced to sell his remaining shares in Valeant.


This is an enormous tragedy of huge proportions being played out here before our eyes. Mr. Ackman’s investors did not deserve this fate, but they are being forced to live it nonetheless. How truly sad. He averaged down… again… and again…and again… and again. His eventual demise is a lesson to us all. Would that we learn from it: This is Greek tragedy of the saddest kind. No one deserves this fate.

Here one can probably insert something about glass houses and stones. We eagerly await Ackman's retort, or maybe not.

Next, Gartman picks up on what we said back in September 2015, when bitcoin was trading at $230 and when we suggested that massive Chinese capital flight is about to send the digital currency much hgher. It is trading at $580 now, the highest level in two years. Here is Gartman's attempt to understand what is going on...

Regarding Bitcoin… which we rarely write about and which we truly do not and likely never shall truly understand… it has had a recent massive bullish run, predicated upon immense Chinese buying. We are quite certain that much of this buying in the past might have made its way into gold, but has been diverted in Bitcoin for a number of reasons not the least of which is the secrecy involved in transacting trades in it. Bitcoin is the Millennial’s answer to gold it seems and although we shall never understand that fact… just as we shall never really understand Millennials themselves… this is reality and we need to come to understand that. 


That said, Bitcoin traded very poorly yesterday, peaking early in the day on a spike higher and then closing sharply lower and at or very near to the day’s lows. This is ominous then for holders of Bitcoin, but it may at the same time be supportive of gold in return. Time only shall tell.

... and failing.

Next, a quick update on how a "pleasantly long" Gartman is positioned:

[We are hedged] via a position in the derivatives market, sufficient to bring our net market position to one that is “pleasantly” but not materially long. We covered some of that position early yesterday as it appeared for a short while that the market was heading higher, but as the market “failed” late in the session we put back that which we had covered to effectively keep our “pleasant” net long position intact. We are, as of last night’s close, +2.6% for the year-to-date, out-performing our International index and just about equaling the return on the S&P itself, but from a “hedged” position.

Finally, today's trade of the day:

NEW RECOMMENDATION: We wish to sell the EUR and to buy the Swiss franc this morning upon receipt of this commentary. As we write, the cross is trading 1.0972:1 and we shall risk the trade only to 1.1045. Should the cross trade below 1.0940 we shall not hesitate but to add to the position, and our target as we move toward the British Referendum… and beyond… is to “parity” once again, knowing full well that the Swiss National Bank shall object to the trade.

You know what to do.

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junction's picture

One of Gartman's relatives was involved with monkey business in Kenya.

VinceFostersGhost's picture



Tread lightly Dennis....


There's nothing wrong with just shutting the hell right up.


I've done it a couple of times....and it totally works.

thesonandheir's picture

Has Gartman gone balls deep in stocks yet?


Time to short

NoDebt's picture

I can't believe I'm going to say this, but it might be time to buy Valeant.  My thesis is predicated on the following:


1.  Dennis Gartman says don't buy it.

2.  See #1.


Not sure I've got the stones to actually do this, but the evidence is incontrovertable.

NoDebt's picture

"out-performing our International index and just about equaling the return on the S&P itself, but from a “hedged” position."

I.e. incurring a lot more cost to produce these middling returns that Joe Six Pack got by buying a Vanguard S&P 500 Index Fund at 9 bps.

stant's picture

Be a good time to buy lee_mon ,if ya could

BorisTheBlade's picture

You guys. Give the credit where credit is due. By that time you should've all realized prophetic nature of Dennises pronouncements. In fact, I would go as far as to suggest that given his impecable historic performance, deep and unprecedented understanding of underlying trends driving capital markets and his impressive business acumen, he deserves a righful place among the best in the proverbial hall of investors' fame. It is only fitting that he finally gathers all his abilities and pulls his tremendous resources and finally launches what we all should except of him, what many will consider a flagship among investment banks. Presenting to you: Gartman Sucks!

FMR Bankster's picture

Clearly he has been a powerful contra indicator. When he says "we" are doing something (apparently him and the mouse in his pocket) in his retirement plan, I'm confident it's the all clear signal to go the other way.

jcaz's picture

Do it.   I used to have the same apprehension about going against Gartman, but I've traded serious money against him for two years now,  and I (or is it "we"?) have yet to lose.   I don't like it, either,  but I just hold my nose and push the buy button on Valeant.

jimymac's picture


"with the leading example remaining the demise of the once sterling reputation of Mr. Bill Ackman of Pershing Square Capital." Just couldn't be further from the truth imo"

RattieNomNom's picture

dont get too cocky!
bitcoin is the mark of the beast! is an banksters' experiment. they will bring a new hash-chain currency soon anyway. bitcoin will be made illegal.

NoBillsOfCredit's picture

Hey Gartman, I thought you did not understand bitcoin!

Prisoners_dilemna's picture

You've been here 17 weeks and we should listen to you why??

You've just finished school and think you know how the world turns??

"Its better to remain silent and let ZHers think you're an immature idiot than to type your mental diarrhea and remove all doubt."


You're not done learning kid.  I suggest "Economics in One Lesson" by Henry Hazlitt, free online.

Then "Road to Serfdom" by F.A. Hayek.

And since your a Christ-tard I suggest the ThunderboltsProject channel on youtube.

Prisoners_dilemna's picture

That's Mr. Punk or Mr. Punk Sir to you, rat.

TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) RattieNomNom Jun 8, 2016 8:18 AM

You know nothing about Bitcoin, come to the future

jeff montanye's picture



in castigating averaging down he cites enron and us airways, two classic bankruptcies, then sugar falling from above a dollar to three cents.  he goes on, in the same sentence, to the u.s. tsy long bond's coupon falling from 14.75% to "single digits".  it actually hit single digits first in the mid eighties.  it's now at about 2.5%, about its low since the bond bull market started in 1981, a level first seen christmastime 2008.  the point is: why mention it in this context?  as an example of a (not mentioned) short gone wrong?  


certainly anyone who "averaged down" into this asset in the last thirty five years felt like a genius pretty soon.  following on his sugar comment it does seem a bit asinine.

catalysis's picture
catalysis (not verified) jeff montanye Jun 8, 2016 9:16 AM

He's not wrong.  Averaging down is basically the definition of compulsive gambling.

mkhs's picture

Averaging down just smooths out the fluctuations.  I bought ati at 14.30 two weeks ago, or was it three?  I doubled down at 11.10 last week.  Today, I sold both lots at 14.10, a small but happy profit we will take to the bank.

BandGap's picture

Gartman looks like that drunk uncle that shows up late to family gatherings and always asks if you have something to drink.


mkhs's picture

Do you have something to drink?

centerline's picture

bitcoin - allowed to exist because it serves a purpose.

VinceFostersGhost's picture



When you sew bitcoins in your clothes's like walking on air.


Got that little tip from Chuck Munger.

Grave's picture

if these clowns had at least 1% of their portfolio in bitcoin, they would have raked in hundreds of millions already, its up 200% and the uptrend just started :p
and bitcoin loves to fractal up and jump in value by order of magnitude, above previous ath :D

centerline's picture

Trade it like you stole it.  Store of wealth?  Well... that seems to be the big problem these days in general since everyone smells that the casino of modern financialization is on fire and big governments have run amok.

ack's picture

Gawd. The Tribe is a nasty bunch. How will they ever survive together in that bunker?

VinceFostersGhost's picture



How will they ever survive together in that bunker?


Throw a gun with one round in the chamber in the hilarity ensue.

Prisoners_dilemna's picture

Why are the chambers of a synagogue round......??

So no one can hide in the corner when the collection plate is passed around.

Bay of Pigs's picture

Gartman is going down the tubes himself and taking a bunch of people with him. Not sure who would listen to this tool at this point in time. And Ackman is getting exactly what he deserves.

Davidduke2000's picture

Both desrve what they get, arrogance destroyed Ackman and stupidity will destroy the other loser. 

Grandad Grumps's picture

I have to tell you that the quality of the articles on ZH yesterday was pretty poor. I went from one to the next and wondered if they had been written by 3rd grade propagandists in training. Lots and lots of premises and assumptions with little hard data and real analysis.

Hopefully this is not a trend.

mkhs's picture

If you don't like it, ask for a refund ganpa.

buzzsaw99's picture

wrong mother fucker. they/we ALL deserve that fate.

Kagemusho's picture

The normal response to Gartman's advice can be summed up in that famous line from Monty Python's Holy Grail movie: "Run away! Run awaaaaay!"

Calculus99's picture

9/11 was an enormous tradegy of huge proportions.

A Ferry sinking and killing 100s as well.

A massive bush fire that kills loads and wipes out a community likewise.

But a billionaire hedge fund getting creamed along with their rich clients is hardly an enormous tradegy of huge proportions.


TradingIsLifeBrah's picture
TradingIsLifeBrah (not verified) Calculus99 Jun 8, 2016 8:14 AM

Is it a tradegy if your pension was invested there as well?

taketheredpill's picture


Paul Tudor Jones just did a piss-take. "Wha?!..Old Friend?"



Squid Viscous's picture

a guy over 60 with a prison pussy said what?

no, not you Cramer

ultraticum's picture

 . . . just as we shall never understand millenials . . .


I'm neither a millenial nor a boomer like fartman.  He appears to be the embodiment of his generation: a self absorbed, empty narcissist money jobber:  adding no value to society, benefitting from a system that has actually enslaved those very millenials he claims to not understand.  All the while never, ever understanding this obvious fact.

Oh, and he parrots some mainstream narrative about Bitcoin's rise (must be them China hot money criminals).  Actually people everywhere are slowly waking up to a decidedly non-bankster, non-state, deflationary, digital store of value.  Shhh . . . . don't tell those poor fartman subscribers.

colin's picture

bitcoin is just a distraction from Gold and its side kick Silver

affirmed_78's picture

Only a real loser brags about being up 2.6% YTD.  Those gains could all evaporate on any given trading day.

Fenix's picture

I am not sure bitcoin is actually used to circumvent Chinese capital controls - maybe some people are just buying because they believe in the technology, at the moment people including some crazy Chinese speculators-gamblers probably are buying because of the imminent block reward halvening etc.