The stock market and the economy are not the same. It's sometimes difficult to sift through real profits and real growth after companies massage their messages with pro forma earnings and charges to present a more pleasant picture. Add the Grantham warning that profits and margins are mean reverting, coupled with the deflationary competition from Chindia, and you get a market priced for perfection.
Meanwhile, amidst a sea of global liquidity, gold, silver, copper, and palladium frolic as 'wealth alternatives' to fiat currency. Abandoning the gold standard, central banks have the opportunity and the political support to create dollars out of nothing at all, in a desperate effort at currency debasement. Gold finds that hard to stomach, and creeps steadily upward (net long NEM via optio
I had a patient this week with something called 'Gas Bloat Syndrome'. Actually that describes both the economy and Wall Street's commentary. Energy prices rise (non-core inflation of course) and Wall Street pundits wax eloquent about trees growing to the sky.
Colleagues ask me if I am 'bullish' or 'bearish' and I say, about what. Although much of what I do is short-term in nature, I believe in long term themes, 1) water as the most important commodity, 2) metals as a hedge against endless currency debasement (the 11th plague, the central bankers), 3) homeland security investment in an era of The Hot War, 4) the outsourcing of American jobs to Chindia resulting in a rebalancing of global standards of living, and 5) ultimate deflation from low cost producers (see #5).
Dynamics Time - Sunday Best at 2005-12-12 18:19:45 Educational use only. Never intended as advice. "First above all, to thine own self be true." - Shakespeare The most important message that I have to carry for myself is 'believe what you see,' although be prepared to change.
First, just to share a bit, 'what I'm listening to'. I subscribe to Napster, and there's always something spectacularly good (or bad) to listen to. The Trans-Siberian Orchestra has some fantastic, upbeat instrumentals, and for some off-beat sound, I enjoy 'The Killers' and 'Fountains of Wayne'. The kids recommend Green Day and Coldplay, and some of it really grows on you.
Everyone here knows the themes, and one is 'mean reversion'. No guarantees, just a look at where we are.
Big picture: "the race is not always to the swiftest or
