Gartman Warns "Buying Equities Here Shall Be In The End An Ill-advised Action", Compares Ackman To Madoff

Soros, Druckenmiller, Icahn, Goldman, Deutsche, and now... Dennis Gartman.

From the latest letter by the "world-renowned" commodity expert who at last check was "pleasantly long."

We begin then by noting that the CNN Fear & Greed Index is still above 80 in openly “greedy” and thus openly over-extended-to-the-upside territory. Some might call this “nose-bleed” territory and we shall strongly… indeed very strongly…suggest that buying equities here shall be in the end an ill-advised investment philosophy or action.

Bad news for the bears? Not really:

We remain, however, modestly net long of equities given that we are still long of aluminium; long of a small energy production company’s shares and long of a high-tech, “Cloud” related company’s shares, all of which have done quite well recently. We are long too, of course, of gold in EUR and Yen denominated terms; but we have derivatives positions in place sufficient to reduce our net long position to something which we’ve referred to as “pleasantly” long: long, but not materially so. We shall sit tight then and do nothing more… at least for the moment.

And then, another swipe at Bill Ackman, one which may well provoke a response as Gartman goes so far as comparing Ackman to Madoff:

Finally, concerning what has happened of late to Pershing Square and Mr. Ackman, we had a discussion with a friend in the hedge fund industry yesterday… a “rival” of Mr. Ackman’s… whose “take” on this question was most interesting. Our friend is convinced that Mr. Ackman’s effect upon the hedge fund industry may in the end by more dismaying than the effect that Mr. Madoff had upon it, for Madoff was a  matter of criminality that should have been discovered but was hidden for a long while from view, while Ackman’s actions have been long standing, inexorable and perhaps repeatable by others, creating fear amongst institutional investors who will, in the future, be unwilling and/or unable to put money at risk in these same manners. Money will not, in the future, allow itself to be gated, and in response the entire hedge fund industry will be diminished.


Once again, averaging down into long positions while averaging up into short positions… and continuing to do so even as the trend is clearly against one... is what we have referred to as the sole “carcinogen” in the investment/trading business. The demise of Nick Leeson; the collapse of Sumitomo Metals; the problem caused by Mr. Kerviel at SocGen… all came about by adding to losing positions and by disregarding risk. It is our duty to avoid such nonsense. Hopefully we shall continue to do so.

Of course, the best way to avoid such nonsense is to just keep trading one's "retirement portfolio."