Sunday, November 21, 2010

As speculators withdraw?

As speculators withdraw, the market bears awaken - DAVID ROSENBERG From Wednesday's Globe and Mail Published Tuesday, Nov. 16, 2010 the link:

Rosenberg ”Right now, there is still an extreme level of speculative activity that is set to unwind as the appetite for risk fades away.”

I have always maintained that economists should leave the forecasting of the equity markets to the fundamental and technical analysts. After all we do not in engage in economics. Keep in mind an economist is a trained professional paid to guess wrong about the economy but - if a securities analyst gets it wrong they lose clients.

Rosenberg clearly doesn’t know the difference between a speculator and a risk taker. A speculator is a short term opportunist who may short the S&P or soybeans. A risk taker is one who wants to put capital to work because they see opportunity. Speculators drove silver to $50 and created the dot com bubble of 2000. Risk takers built the railroads, the Ford Model-T, the micro-processor and the Blackberry.

Currently the smaller companies are out performing the bigger companies and that tells me there is an appetite for risk among investors who have decided to put capital back to work because the end of life as we know it – is not likely. Our chart is the daily of two relatively new exchange traded funds of the smaller company gas producers (ZJN) and the oily producers (ZJO) – both at new 52-week highs and leading their large cap peers – say no more – say no more.

1 comment:

Piazzi said...


Bill, poor Dave is serving us all a good purpose

when he gets really excited, we seem to be near some sort of a bottom

when he is subdued and stops congratulating himself on how prudent he is keeping people in 4-5-6-7-8% dividend, we are near some sort of a top

don't rattle him too much, or I may lose one of my indicators