More than a couple of decades ago, a very talented programmer introduced me to a common phrase that engineers use when queried (by management) as to when such-and-such a product was going to be finished: “Real Soon Now.” It was a delightful phrase, because in three words, it captured the condescension programmers have for management as well as the wily deceit they need to use to keep their jobs. It was, in short, a way to get the inquisitor off their back.
For the past five years, the bear market has been promised to resume Real Soon Now. I have been as guilty of this as anyone although, as the years have ground on, I have certainly tempered my passions and self-assurance. Although I am a bear at heart, I have made a point of posting as many good long ideas as possible, not only to try to be balanced, but also to provide value to readers in this up-every-day market of ours.
There are a couple of online publications I have read for these many years which, for most of the past five years, have been pledging that the drop, the crash, the rapture – – whatever you want to call it – – what going to take place Real Soon Now. To paraphrase Herbert Hoover, calamity is always just around the next corner. The two publications, as you might guess, are ZeroHedge (“ZH”) and a variety of items from Elliott Wave International (“EWI” or, as I sometimes refer to them, “our friends from Gainesville”).
One would assume that if a boy cries wolf a few hundred times, people would start to ignore him. However, there are a couple of techniques these respective folks have. For EWI, there is always an Alternate Count. No matter what has been projected, there is always some other interpretation of the wave pattern that explains away why The Thing That Was Supposed To Happen Didn’t Happen At All.
For ZH, well, there’s always bad news somewhere in the world to point at, and that gives a form of “hope”, so to speak, that the feces are about to hit the fan. The bad news could be the latest map of aircraft carriers in the Persian Gulf, or some new bird flu in Asia, or the collapse of Bitcoin, or a surge in homelessness, or the ObamaCare debacle, or – – a perpetual favorite – – a story about how the Fukushima Reactor is about to turn us all into glowing mutants, but none of us know this, because the powers that be won’t let it be known how big the disaster is.
I mentioned a “couple” of techniques, and I’ve only named one each. Well, the second technique for both publications is, frankly, their analyses remain compelling. No matter how many times I might say, “OK, that is it; I keep getting sucked into this narrative, and it never turns out the way they say, so I’m just not going to read this stuff anymore” – – well, another really good article is published.
Just tonight, I was reminded of this on ZH with this article, although if you read the comments carefully, you can see that the readers (errr, “bitchez”) over there are kind of getting so fed up with the market that they basically are giving up en masse. One of the highest-rated comments on that post stated, “We had the same conversation this time last year, but S&P was 29% lower and gold was 28% higher.” How true. The “stocks are doomed and gold is going to soar” narrative has been devastatingly wrong for True Believers.
So what’s my point in all this? I’m not sure really. Sometimes I do these typing-out-loud posts just to make myself examine why I do what I do, and in this case, why I continue to read what I read. As I’ve mentioned before, though, there really is no redemption at this point. The market could go into a nonstop free-fall for the next twelve months (ha! ha ha!) and there is no plausible “I told you so!” that can be offered by the bears. It’s one thing for the market to defy expectations for a month or two. But listening to Real Soon Now for five years running? No, that’s another matter altogether.