The end of the month will be a momentous occasion: not only will it mark the first full decade of global central planning, but it will also be the end of a newsletter era, as the Gartman Letter winds down, as we first reported last week. And in one of his last trade recos, had one last reco to his soon to be former clients and everyone else: Donald Trump’s multiple trade wars and other threats mean it’s time to sell and go into cash.
In a phone interview with Bloomberg, Gartman said that "people should be taking a lot of profits and getting far less involved with stocks than they have over the course of the past two or three years." As a result, Gartman recommended investors puts 60% or more of their assets in cash, despite refusing to say if stocks have peaked.
Then again, it wouldn't be Gartman if even his last reco was an attempt to cover all bases, because as the same time as he was telling Bloomberg it's time to cash out, in today's edition of the Gartman Letter, he had a distinctly different take, saying that:
"it seems that all news of any kind was… and is… deemed to be bullish. Better earnings and sales were and are bullish, of course; but poorer earnings and lesser sales were and are seemingly bullish too; geo-political good news was and is bullish; but geo-political bad news was and is bullish too; monetarily expansionary central bank policies were, of course, bullish; have been bullish and will likely be bullish of shares in the future, but contractionary policies were deemed to be bullish too for it was considered only a matter of time until those contractionary policies were to be turned expansionary again and in anticipation of that turn were considered bullish too. None of this, of course, makes and/or made any sense whatsoever for opposites cannot be equally bullish… or when the time comes, bearish… at the same time except during periods of egregious eccentricity such as we are experiencing. Thus, so we have had to remind ourselves again and again and seemingly ad infinitum that “The market can remain illogical far longer than we can remain solvent."
And then the following rejoinder:
Illogic can mean prices may run to historic levels as TINA (There is No Alternative) and FOMO (Fear of Missing Out) continue their illogical but well-choreographed dance together. But the meter of the dance is reaching a fevered pitch as exemplified by the unanimous rise in our International Index today, to the point where these two strange partners may soon collapse in a heap. Perhaps Friday’s, Monday’s and Tuesday’s weakness was the first indication that TINA and FOMO are exhausted and need to sit down. Time only shall tell.
We can't really blame Gartman for throwing his hands up in disgust at a market that no longer makes any sense, or deciding that it's time to move on from a business that central banks have made a mockery.
Going back to Gartman's Bloomberg interview, he laments the adverse side-effects of the ongoing trade war, and cautions that "when you conjure up a trade war such as he’s conjuring up - you’ve heard it before and you’ll hear it again - this is a very slippery slope, and once you go down that slope, it usually ends badly."
"We’ve run a trade deficit with the world for the last five decades -- is the United States a better place to live in now than it was 50 years ago? The answer is: absolutely", he continued.
Yet even as the world continues to slide ever deeper into trade war, optimism that said war will soon end has pushed stock prices to "egregiously high" levels, Gartman said.
"I’m still marginally net-long but I’m demonstrably less long than I have been and I’m thinking about getting less long today," said Gartman.
"It may only be a matter of a few days before I start saying I’m going to be net short of stocks", he concluded.
To be sure, it wouldn't be the first time. Consider:
- Gartman Stopped Out On Market Short, Feb 26, 2018
- Gartman Shorts The Nasdaq, Is Stopped Out Minutes Later, from April 26, 2018
- Gartman: "We Were Clearly Wrong In Being Short Of The US Market", August 2, 2018
- Gartman: "We've Tried Being Short Of Equities Before And It Proved Unwise", August 31, 2018
- Gartman: "We Are Officially Recommending Shorting This Rally", November 8, 2018
- Gartman: "It May Be Time To Re-Enter The Short Side", from November 30, 2018.
- Gartman: "The Time For Buying Stocks Is Past", February 20, 2019
- Gartman: "We Make An Official Recommendation To Sell Stocks Short This Morning", May 17, 2019
- Gartman: "We Are Closing Our Short", June 7, 2019
- Gartman Goes Short, October 10, 2019
- Gartman Stopped Out Of His Short Just One Day Later, October 11, 2019
Here's it's perhaps worth noting that as Gartman makes his last bearish reco public, stocks are once again storming highern, with the S&P less than 1% away from all time highs, almost as if the algos are taking advantage of every remaining Gartman appearance (in a "contrarian" fashion of course). Or maybe not so "last" - speaking to Bloomberg, Garts said that he won’t be giving up TV, radio and print interviews and may be looking into launching a podcast.
Finally, here is why - in Gartman's own words - he decided to pull the plug on the one product that made him famous over the past three decades:
The decision was partly driven by competition that has ratcheted up in recent years, said Gartman, who plans to spend more time with his family, among other things. “It’s so much more difficult to keep up,” he said. “It’s just time to say, ‘I’m done.”’
And in parting, for those asking what is in Gartman's retirement account, here is the answer:
Regarding our retirement account and being perfectly redundant here this morning, we continue to hold the same corporate and government “debt” securities that we’ve held for the past many months, noting yet again that the monthly dividends that accrue do add up materially over time. We have, however taken up a rather large hedge position via various derivatives these past two or three days and it is our intention to add to those derivative positions on almost any intra-and- inter day strength.