Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

The Bullish Mindset

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Each morning, SeekingAlpha sends me a summary list of all their articles. I usually have time to glance at the headlines listed, and on occasion an article will intrigue me enough that I'll click on it.

This morning one such article was called Stocks Are Cheap, so naturally I just had to click on that one. The article begins, "These days, one of the arguments that really annoys me is when somebody
claims that even after the 50% decline in the major indexes stocks
aren't cheap
."

Well, that was all it took to send me right up the tree. I like intelligent, rational, logical arguments. Gary Savage, for example, is a big gold bull. I'm very short precious metals. But the reason I carefully read Gary's work, and the reason it makes me a skosh nervous being on the opposite side of him, is that his arguments tend to be well-formed.

But saying, in essence, "stocks are cheap because they are down a lot in price" is simply false. One nice thing about SeekingAlpha is that you can look at the prior works of the same author to get a sense of some things he or she has written in the past. Here are a few others which caught my attention:

1/23/2008 – I'm a Buyer of Apple on This Selloff
Closing price of AAPL on day of article:139.07; Closing price yesterday: 86.95; net change  -37.5%

7/18/2008 – At These Prices, eBay Is a Steal
Closing price of EBAY on day of article:23.98; Closing price yesterday: 11.53; net change  -52%

8/18/2008 – Why I Got Long Oil Today
Closing price of OIH on day of article:175.37; Closing price yesterday: 69; net change  -61%

I think you get the idea.

Now, in fairness to the author, there seemed to be some articles that were pretty well-timed, and the writer's self-reported trading performance seems extremely good. But it at least helps to read similar articles from the past and how the writer thinks to measure how seriously one should take current writing.

There was also one called 7 Reasons Why I'm Playing for a Bounce written on September 18, 2008 (!) Here are some of the reasons he cites:

# The Dow has dropped 812 points (-7.11%) and the S&P 95 points (-7.59%) so far this week. (Translation: "The market will go up because it has gone down recently")
# The Fear Index (VIX) spiked to 36 Wednesday and closed there – the highest closing level since 2002. (Translation: "The VIX is much higher than it has been in a while, so it shouldn't go much higher")
# The SEC yesterday outlawed naked shortselling on ALL public companies.  If you recall, they did the same thing back on July 15th except it just applied to the largest financial stocks – and it worked as that day marked the bottom for financials.  In other words, the government is sort of making it illegal for stocks to go down.  (Translation: "The government is going to protect the investing public.")

My point is that logical, sober thinking tends to beat feelings, notions, and ruminations. It was tortuous for me, as a thinking person, to see the asset bubble, because illogic grinds at me. The reason I take comfort in this market is that rationality reigns, and a fellow like me can finally make some coin.

Monday Wrap

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Here are a few "bonus" charts on top of the 25 or so I laid out through the course of the day……

As for what's next…………..my target for the S&P remains between 600 and 650. We have had seven consecutive lower closes in a row. The likelihood of an eighth consecutive lower close (tip of the hat to molecool) is a mere 0.65%.

We've been "due for a bounce" for approximately forever, and I'm glad I held strong today; it was, in dollar terms, far and away my best day in my life. I will sweep away all stops and update every single one of them with the morning's open. I want to preserve as much profit as possible while remaining open to further downside.