April 16, 2008

"Goldman Sachs and Wells Fargo warn 'delusional' investors on stocks." So what's your portfolio looking like today?

So what's your investment portfolio look like today?

On stocks, are you a bull or a bear?

I'm neither. I'm still into "asset preservation" and currency diversification. Commodities, food, oil, foreign markets, multinationals, dividend payers, foreign currencies, gold, silver. Knowing Bernanke is doing all he can to start a new bubble somewhere (hint - it's already well underway) while destroying the dollar.

Some companies are going to be going away these next few months, others will see their stocks continue to get pummeled, while others will do just fine. And there's a LOT more surprises to come.

I have one word for this market: Dangerous. Invest carefully. Read Crash Proof. Read Manias, Panics and Crashes. And don't put all your eggs in the US dollar. Cash is King - but cash comes in many forms, not just Bernanke's US dollars.

Wall Street faces the growing risk of an equities bloodbath in coming months as the credit crunch spreads to the wider economy and earnings crumble, according to a pair of grim reports issued by Goldman Sachs and Wells Fargo.

David Kostin, the chief US investment guru for Goldman Sachs, expects the S&P 500 index of Wall Street equities to plummet a further 15pc over the "near term" as companies scramble to lower their outlook for this year.

"Although only a few firms have reported first quarter results, early signs are awful. We expect a swath of lowered profit guidance," he said in a research note published today, entitled 'Fasten Seatbelts'.

Mr Kostin, who replaced the ever-bullish Abby Cohen as chief strategist in December, expects the S&P index to reach 1,160, which would amount to a fall of 27pc from the bull market peak of 1,576 in September and enter the annals as a relatively severe bear market.

Scott Anderson, chief economist at Wells Fargo, is equally pessimistic, describing the bullish views of some market players as "bordering on delusional".

"The equity markets have not yet priced in a prolonged downturn in economic growth in my opinion. We are still in the early stages of the credit crunch. Earnings estimates for the second half of the year are likely still far too high," he said.


Anonymous said...

I was a bear on the US Market which is why I bought GRZZX over the last 2 years. It's so tough to be short with the PPT however. These guys are not gonna let the market fall, it has been written. I finally gave up and sold soon after UBS wrote down 19B and their stock along with the market rallied. Its all about perception, and CNBS has everyone convinced the financials have bottomed. Therefore perception is reality. I think the market will continue to defy reality.(Thanks Paulson)The next surprise rally will be the dollar after enough central bank coordination and hammering of commodities, especially gold and silver. The lipstick should be off the pig just as Billary or Obama take over and it will be all down hill from there.

Anonymous said...

won't a rise in food prices make the US like the mideast of food (instead of oil)? I'm thinking the US is going to come out fine, especially after reading how big the RE bubble got in europe. Euro has more problems than the dollar. US homes are getting more affordable. gas is going up like it should be, so people will switch to more efficient cars. sanity gets rewarded now. US exports a hot commodity (food).

Anonymous said...

Food is money

Gold is money

Oil is money

Budvar said...

I think a P/E of 53 for the DOW says it all really, Fifty fuckin three.

"The USA exports food, the price is going up, therefore it will all work out in the end". Yes and if we all dig up our back yards and plant window boxes to help with this export drive, by this time next year, we'll all be millionaires!!

Paul E. Math said...

I've been bearish on US stocks for abour 3 years now. So, yes, I missed the last rally entirely. But that's because I see poor fundamentals behind the US economy in general and that continues to be the case.

Like the anon who bought grzzx, what I've seen over the last 6 months has almost forced me to believe in the PPT. I cannot fathom how stocks can rise on all this bad news - it defies logic. One might argue that the bad news is already 'priced in' but the prices aren't even low, relative to earnings. In fact, prices are high considering earnings are tanking.

But I'm sticking with my fundamental analysis, despite the PPT, and I'm staying with my BEARX come what may. The system can't stay rigged forever.

screwchina said...

Amazing that we're in one of the worst financial environments of our lives, yet the DOW is down only about 10% from its all-time high.

There appears to be no such thing as bad news any longer.

Ford said...

I sense the stock market should drop 40%, however many independent analyst suggest the stock market will go way up near end of year, stay up a bit, then fall a lot. What do others here think about this theory?

Anonymous said...

I swear HP is in a world all onto its own. Equities bottomed in January.
Oh what's this I see today...another rally in financials. Keep talking doom and gloom boyz and girlz. I'll be out making money while you all shout in your little echo chamber.

Batman said...

What you want to be looking at now is a historical chart of P/E averaged for the DJIA. From averages of around 15, we're now spiking to all time highs.

Hands up if you think we can maintain this?

LibVet said...

Pulled my dough out of the stock market last Summer. You should have heard my brokers bitch!

Merrill Lynch is paying 4.8% in their cash management accounts. I kept my dough there until the price of their stock started bouncing up and down 10% a day. Good grief!

I'm losing money against inflation now. Bought CD's. The hell with it. I don't care if I am losing a few percent a year these days. I'm old. I have seen a few things in my day.

LibVet said...

Budvar said...

I think a P/E of 53 for the DOW says it all really, Fifty fuckin three.


LOL. I like you, buddy. That is EXACTLY right.

Anonymous said...

It looks like they are delusional today too!

Dow already up 150+

Probably will be a 200+ day to make
up for the -200 day last Friday.

I never get why the market doesn't tank on the bad news like GE, Wamu, etc....

Who keeps putting money in the market?

Miley said...

Useful items such as food and water are understandably valuable,
I believe that as we move thru the impacts of Globalization, Clean and fresh water will become an issue, not sure how it will play out, but we here need to figure out a way to capitalize on this,(invest / buy low) before the hoity toity loony BBC, FT and the UN start crying ‘Water crisis’.

But Keefer, I think investing in other currencies just does NOT make sense,
It is impossible in a time were we all have access to the same information and the consolidation of financial ideas and decisions that 1 paper money can do better than another paper money.

That said: with all the problems we point out here daily on the USA.
we are by far the best positioned to succeed, and of all the globes paper currencies I bet 100% on the greenback, and don’t care how down we may feel about ourselves sometimes, when the sun comes up again, as it always does, the underlying fundamentals
we’ll be clear, a lazy sudo-socialist Europe will never outshine the American drive.

Fellow HPers please research ways to invest in the coming ‘fresh water’ bubble,
Very much looking forward to insightful ideas.

It’ll be fun to be on the bullish side, before the all the MSM starts repeating each others.

keith said...

I've gotta say, the "Schiff Portfolio" sure has been a winner

BTW, the DOW P/E is 14 today - not sure where you're getting 53 budvar.


Folks, it doesn't pay to be a perma-bear or a perma-bull. react to the enviornment. choose wisely. And understand what the Bear Stearns Bernanke Put meant, and understand what the massive upcoming taxpayer bailout of the REIC and housing gamblers will mean (especially for the dollar)

Oh, those checks should be hitting anyday now too...

The market could crash tomorrow, more banks could go under, or we could have hit bottom with Bear. Who knows.

But what you can bank on is Bernanke. He told you what he was going to do, and now he's doing it.

Keyser Soze said...

I am a long term investor...5 years is a trade for me! With that in mind, there are several opportunities out there in the financials and tech, for the long term investor. If a sector has become popular, it's too late to buy.
Good luck everyone!

miles said...

The credit crisis is 75% over says Jamie diamond.The CPI was weak today. When are the credit default swaps gonna hit the fan.

I have a large position in QQQQ that I have owned for years should I dump it now - with this good intel news

Anonymous said...

Drudge headline today:

Oil hits new record as investors flee the falling dollar

The Housing Bubble Ate My Balls! said...

I have heavily invested US$ in a wall safe.

I am just a working stiff what else can I can I do?? Stockpile food?

Anonymous said...

"Folks, it doesn't pay to be a perma-bear or a perma-bull. react to the enviornment. choose wisely. And understand what the Bear Stearns Bernanke Put meant, and understand what the massive upcoming taxpayer bailout of the REIC and housing gamblers will mean (especially for the dollar)"

What QWEEFIE really means is:

Sorry for telling you to sell all your stocks in January and missing out on a 10% run.

Anonymous said...

fool's rally before the slaughter?

keith said...

Uh, last I checked stocks were down pretty good since January even with this latest bump

But when it comes to stocks, you're on your own. I have no idea where this market goes.

But I know where the dollar goes...

keith said...

What looks worse - Phoenix home prices or Crocs stock?


Lesson: Fads - always stay ahead of the sheep

Anonymous said...

I like PRPFX Permenant portfolio. When stocks rally hard it goes up. When gold goes up it goes up, when the dollar goes down it goes up. Look at the chart for this decade. It has gone up nice and smooth and unlike the other investments it hasn't made my stomach churn. ITs a quarter gold and silver, some comerical REITs, swiss francs, some resource stocks and is based on inflationary expectations

My only complaint is I wish it had more dividends. My othe complaint is I should have have adding to that all along and forget some of the other stuff. IRA's don't even interest me anymor. They will be taxed to death when Im older.

Anonymous said...

What do you have against crocs now? Ever wear a pair? Most comfortable thing ever.

Lady Di said...

Diversified is the plan - I haven't put all my eggs in the inflation or deflation basket, because I am not sure which one it will end up being.

So, I am in cash (dollars), foreign currencies, gold and silver, commodities, US and foreign stocks and real estate.

which will probably put me at break even for the year...

Anonymous said...


Look at the run up today. There is no sense to this market, no rhyme, no reason.

You might as well take your chips straight to VEGAS- its the exact same game being run.

And Remember- The house always wins.

CROCK of B.S. said...

Excuse me for a moment but-


WHAT Else did you think was going to happen to their stock??

OK, stepping off the soapbox now--
Whew, that felt gooood.

Gabor said...

You guys need to be careful with all those shorts. Stocks are assets just like houses and gold, the more the dollar collapses, the more dollars it will take to buy all these things. Stocks don't have to collapse, they can go up very slowely yet the dollar can go down very quickly and you still lose purchasing power. And that's what it's all about, purchasing power, not # of dollars.

Anonymous said...

Hey Miley ,

I was thinking the same thing about water. Maybe a good play would be in water desal. plants.
I know that corn takes a tremendous amount of water to farm.
Out here in California, MWD & the LA water dep. have been expanding their operations for years maybe to capitalize on future supposed water crisis. Lets try and locate best desalinization plant corp. that payS the best dividend.

This market is outright scary!!!
How can somebody have faith in stocks without fundamentals behind them.

People who believe that the market always points up sounds a little too familiar!! (HOUSING)

Stock market speculators (not investors) = housing flippers

How make millions flipping stocks by JIM CRAMER


Reddy Watt said...

I put all my money in forever stamps! They'll never go down baby!

BondsOfSteel said...

Wize words there Keith. Being an investor first is more important than being a bear or a bull.

These days, I'm buying senior notes from 'too big to fail' financials... getting close to 7% yeilds. MS, C, MER, LEH...

The auction rate muni market has been good to me. 10% tax free insured yeilds! The party's almost over as refinancing is picking up.

I also hold long term ETFs/stocks that I've been selling covered calls on.

Anonymous said...

I dont agree with you on this one Keith.

I have to be a bear on this market, but then again, I have been a bear for quite some time (over 1 year), and have been wrong for quite some time until recently.

I cannot control the idiots running the investment funds in wall street however, and when they say the market will go up, it seems they all get together and go against the tide (or reasoning). I will give you an example. Real Estate and Homebuilders are kicking ass lately. Yeah, you got that right, they are kicking ass. Why????? I have no freaking idea, but they are probably back to 6 months ago prices. Even when there is no need for homebuilders or any real estate related companies, there are rising.

What can you do? Things do not make a lot of sense sometimes, that is why I'm taking a beating right now. But I am holding my bearish position.

I do not like gold right now either or any commodities for that matter. I think they are all over priced due to the falling dollar, and will start falling if the dollar starts gaining ground. Will the dollar keep dropping? perhaps. But I have a feeling that when Europe starts taking a beating on their bad investments (housing anyone), things will level off and the dollar will rise, and you know what will happen to commodities if that happens. Plus, there are too many speculators betting against the dollar right now, if they run, you know what will happen. For a preview, just look at what happened to housing.

I can't speak for oil though, since there could be a case for peak oil, but I don't know the details of that (I don't buy either). If you look at the demand growth in the last ten years, it DOES NOT support current prices, it just doesn't. Food is also another subject also, since they seem to be waisting a lot of it it on the biofuel crap.

If I had investment in the Euro, I would be pulling all of it out right now. Im not sure where I would park it, but it would not be the Euro folks.


Chus said...

This is what I think: Goldman Sachs Earnings