My wife and I had some shocking news this morning when she was told that the husband of an old friend of hers was stabbed to death by a random nut in a pub last night. I didn’t know him that well but we’d spent some time with them and he was a very decent, hard working, family man who leaves a wife and two children behind. Just incredible, and a reminder that very bad things can happen to good people, and that people don’t always make it to three score years and ten even nowadays. After two close friends of mine died within three months of each other two years ago that is now three people in my circle all dead from various causes in their early to mid-40s. Very bad luck and extremely thought-provoking. (more…)
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.
Einhorn Calls a Spade a Spade
No less a publication than the Wall Street Journal has this as their most-read story (on the same day the Dow Jones Composite made a new lifetime high, never-before-seen-in-the-universe closing value):
Here’s a morsel:
We have repeatedly noted that it is dangerous to short stocks that have disconnected from traditional valuation methods. After all, twice a silly price is not twice as silly; it’s still just silly. This understanding limited our enthusiasm for shorting the handful of momentum stocks that dominated the headlines last year. Now there is a clear consensus that we are witnessing our second tech bubble in 15 years. What is uncertain is how much further the bubble can expand, and what might pop it.
In our view the current bubble is an echo of the previous tech bubble, but with fewer large capitalization stocks and much less public enthusiasm.
Some indications that we are pretty far along include:
+ The rejection of conventional valuation methods;
+ Short-sellers forced to cover due to intolerable mark-to-market losses; and
+ Huge first day IPO pops for companies that have done little more than use the right buzzwords and attract the right venture capital.
Anti-Social
I know people are ga-ga again about social networking stocks, but I’m very sorry, the chart below is jumping up and down, screaming to be shorted. Can’t you hear the screeching?
EEM vs SPX
I’m watching emerging market weakness vs the S&P 500 to see if weakness persists, or whether investors increase their risk appetite and place their bets on emerging market recovery.
If price breaks and holds above the 200 MA shown on the Daily ratio chart below of EEM:SPX, we may finally see a recovery on the horizon. Otherwise, look for extreme weakness if price falls and holds below the 50 MA.
