U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
It's always important to get inaccurate information out faster. :-)
Peter Lynch had the theory Mondays are typically bad for stocks because the weekend just gives the worrywarts time to worry. Eddy Elfenbein puts the idea to the test and finds the S&P is off 8.23% for all the combined Mondays since April 15, 2011. Tuesdays: The S&P has gained 20.05%. [View news story]
In the 24/7 Internet age, there's even more mischief and hysteria that can be generated over a weekend.
During the period 1980-1985 the dollar rose dramatically against world currencies, yet the stock market doubled in value. It's not an immutable law that the dollar and equity markets are related inversely.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
WSD:
You may wish to examine the following chart of historical data, which despite the performance of bonds during the last ten years, conclusively demonstrates that equities outperform bonds handily, over time, including during the 30-year bond bull since 1980, during which time equities have still outperformed by over 30%, even with all the recent travails.
Of course, bond markets are much larger than equity markets, but size has no bearing on performance. Given that data clearly shows that equities outperform bonds, over time, and that bonds are at all-time low yields (high prices), which class of securities do you think will outperform going forward?
For anybody not making a short-term trade, the answer should be rather apparent.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Shilling has written negative articles for many years. His tune never changes. Of course, all bears hit paydirt eventually. Just not now.
So Far, 2012 Is Eerily Similar To 1987 [View article]
mrm:
What does the state of "economic and financial indicators" have to do with comparing 2012 to 1987? They situation with the economy, markets, interest rates, etc., etc. were completely different in 1987, not even close to now. If we have a severe pullback, rest assured it will be occasioned by today's environment and market behavior, not some astrological chart similarities to 1987. The only thing missing from this article is a picture of a gypsy with her crystal ball.
The entire premise of this article is foolish, and occasions fear, simply because some are old enough to remember, or young enough to have heard tales, that the market's single greatest crash day in history occurred in 1987. Running around "curve fitting" indices, then suggesting, completely outside of any other similarities, that markets will follow the same behavior is simplistic nonsense.
The difference between the median and the mean is a direct measure of the skewness of the data. As either the number or magnitude of "way out there" data points increases, the mean and median diverge further.
Again, technical. Your points about housing are correct.
Amidst the commotion over what the sell-side told favored clients ahead of the Facebook IPO, Jeff Matthews points out the company's revenue growth (publicly available) has been sliding sharply for over a year. Maybe a bigger warning sign, Zynga - the equivalent of a hot-dog vendor in Yankee Stadium (FB is The Stadium) - is slowing at an even sharper rate. "People wanted to buy Facebook, no matter what." [View news story]
Like any product advertised and offered at a store at a price, it's always up to the consumer to decide whether it's worth the price and would be a good buy. Of course, in this country, nothing is the responsibility of the decision-makers anymore, whether it be houses, mortgages, IPO's, you name it.
It's always somebody else's fault that one made a stupid purchase, paid too much or executed a bad deal. And, one gets mad and finds somebody to sue (so, some lawyers can get rich). It's the American Way.
People who engage in this behavior would be better served buying a mirror.
My only point was a technical one, i.e., one cannot have a "normal bell-curve distribution" and have differing medians and means at the same time.
How much a change at the tails makes to the median is directly affected by the steepness or shallowness of the curve, not by whether its "normal" or not. Flat distributions with large standard deviations are more impacted by changes in tail data than distributions with values congregated about the mean. In any relatively "normal" distribution with a very large set of data points, it's unlikely that changes in tail data will make a material change in the median or the mean unless there's a flood of new values which upset the normality, e.g., massive wave of foreclosures.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
Hitesh:
A few points:
1) I don't make deep involved studies of housing trends. I apply more simplistic logic. The charts which measure the cost of home ownership versus cost of renting are now at the crossover after many years of home costs being higher. Rents are continuing to trend higher. This will gradually apply upward pressure on home prices.
2) I, also, live in Florida (Sarasota), one of the worst-hit states in the housing crisis. Aside from numerous months of very positive data in Florida, I can see a boom in local home building, sales and related activity all around me, which puts some personal observance to the abstract data. I hear similar stories from friends elsewhere, not everywhere, of course.
3) Unlike many, who seem to think that anyone seeing opportunity in housing must have 100% of his portfolio in homebuilder stocks (what idiot does that?), I place my bets by making a diversified allocation in issues that benefit from housing activity . These include builders, suppliers, REITs, etc. Realty-related investments make up about 15-20% of my total portfolio. And, where possible, I buy common, preferred shares and convertibles that pay very attractive yields, so the timing of share-price rises isn't really critical to my immediate performance.
4) I am of the firm belief that if we see interest rates rise it will be because of a stronger economy and, also, that rising rates will lead more waiting buyers off the sidelines, as they will become apprehensive about losing low-rate mortgages. This will fuel further buying. Affordability is not retarding purchases, now, so increasing rates, still at ultra-low levels, will not have a major impact. Higher rates will also make lenders more willing to play ball.
Because I am a high-yield value-based investor, I look for out-of-favor sectors. I don't try to guess exact bottoms or how long it make take to recover. I am more interested that the shares I purchase are way below historical levels and that they offer substantial yields to alleviate the necessity for immediate price gains in order for them to be good investments.
I'm patient. It's always worked well for my strategy.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
U.S. Flash PMI (first ever) for May 53.9 vs. April's final read of 56.0. It indicates the slowest level of expansion in three months. New Orders 54.8 Vs. 56.9. Backlogs of Work 51.7 vs. 52.2. Input prices 56.3 vs. 63.1. Output prices 52.8 vs. 53.9. [View news story]
Market Pessimism Is Overdone [View article]
It will occur the moment that U.S. rates begin to rise. Equities and the dollar will rise in tandem.
Peter Lynch had the theory Mondays are typically bad for stocks because the weekend just gives the worrywarts time to worry. Eddy Elfenbein puts the idea to the test and finds the S&P is off 8.23% for all the combined Mondays since April 15, 2011. Tuesdays: The S&P has gained 20.05%. [View news story]
Let's Stop All The Pretending [View article]
http://bit.ly/w4jRpw~adamodar/New_Home_Pag...
Market Pessimism Is Overdone [View article]
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
You may wish to examine the following chart of historical data, which despite the performance of bonds during the last ten years, conclusively demonstrates that equities outperform bonds handily, over time, including during the 30-year bond bull since 1980, during which time equities have still outperformed by over 30%, even with all the recent travails.
http://bit.lyw4jRpw~adamodar/New_Ho...
Of course, bond markets are much larger than equity markets, but size has no bearing on performance. Given that data clearly shows that equities outperform bonds, over time, and that bonds are at all-time low yields (high prices), which class of securities do you think will outperform going forward?
For anybody not making a short-term trade, the answer should be rather apparent.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
So Far, 2012 Is Eerily Similar To 1987 [View article]
In 1987, markets lost 21% in a DAY, in October. Not until the spring of 1989 did they recover to the level prior to that day.
So Far, 2012 Is Eerily Similar To 1987 [View article]
What does the state of "economic and financial indicators" have to do with comparing 2012 to 1987? They situation with the economy, markets, interest rates, etc., etc. were completely different in 1987, not even close to now. If we have a severe pullback, rest assured it will be occasioned by today's environment and market behavior, not some astrological chart similarities to 1987. The only thing missing from this article is a picture of a gypsy with her crystal ball.
The entire premise of this article is foolish, and occasions fear, simply because some are old enough to remember, or young enough to have heard tales, that the market's single greatest crash day in history occurred in 1987. Running around "curve fitting" indices, then suggesting, completely outside of any other similarities, that markets will follow the same behavior is simplistic nonsense.
Is It Time To Buy A House? [View article]
The difference between the median and the mean is a direct measure of the skewness of the data. As either the number or magnitude of "way out there" data points increases, the mean and median diverge further.
Again, technical. Your points about housing are correct.
Amidst the commotion over what the sell-side told favored clients ahead of the Facebook IPO, Jeff Matthews points out the company's revenue growth (publicly available) has been sliding sharply for over a year. Maybe a bigger warning sign, Zynga - the equivalent of a hot-dog vendor in Yankee Stadium (FB is The Stadium) - is slowing at an even sharper rate. "People wanted to buy Facebook, no matter what." [View news story]
It's always somebody else's fault that one made a stupid purchase, paid too much or executed a bad deal. And, one gets mad and finds somebody to sue (so, some lawyers can get rich). It's the American Way.
People who engage in this behavior would be better served buying a mirror.
Is It Time To Buy A House? [View article]
My only point was a technical one, i.e., one cannot have a "normal bell-curve distribution" and have differing medians and means at the same time.
How much a change at the tails makes to the median is directly affected by the steepness or shallowness of the curve, not by whether its "normal" or not. Flat distributions with large standard deviations are more impacted by changes in tail data than distributions with values congregated about the mean. In any relatively "normal" distribution with a very large set of data points, it's unlikely that changes in tail data will make a material change in the median or the mean unless there's a flood of new values which upset the normality, e.g., massive wave of foreclosures.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
A few points:
1) I don't make deep involved studies of housing trends. I apply more simplistic logic. The charts which measure the cost of home ownership versus cost of renting are now at the crossover after many years of home costs being higher. Rents are continuing to trend higher. This will gradually apply upward pressure on home prices.
2) I, also, live in Florida (Sarasota), one of the worst-hit states in the housing crisis. Aside from numerous months of very positive data in Florida, I can see a boom in local home building, sales and related activity all around me, which puts some personal observance to the abstract data. I hear similar stories from friends elsewhere, not everywhere, of course.
3) Unlike many, who seem to think that anyone seeing opportunity in housing must have 100% of his portfolio in homebuilder stocks (what idiot does that?), I place my bets by making a diversified allocation in issues that benefit from housing activity . These include builders, suppliers, REITs, etc. Realty-related investments make up about 15-20% of my total portfolio. And, where possible, I buy common, preferred shares and convertibles that pay very attractive yields, so the timing of share-price rises isn't really critical to my immediate performance.
4) I am of the firm belief that if we see interest rates rise it will be because of a stronger economy and, also, that rising rates will lead more waiting buyers off the sidelines, as they will become apprehensive about losing low-rate mortgages. This will fuel further buying. Affordability is not retarding purchases, now, so increasing rates, still at ultra-low levels, will not have a major impact. Higher rates will also make lenders more willing to play ball.
Because I am a high-yield value-based investor, I look for out-of-favor sectors. I don't try to guess exact bottoms or how long it make take to recover. I am more interested that the shares I purchase are way below historical levels and that they offer substantial yields to alleviate the necessity for immediate price gains in order for them to be good investments.
I'm patient. It's always worked well for my strategy.
Is It Time To Buy A House? [View article]
"And this sample I gave you isn't a normal bell shaped distribution. In a normal bell shaped distribution, the difference is much more dramatic."
In a normal bell-shaped distribution, the mean equals the median, by definition.
"Sell your house ... yesterday," Gary Shilling tells Bloomberg. It will take 4 years, he says, to work off still-high inventories, during which time prices could fall another 20%. Turning to Facebook: "(It's) the end of the social media boom ... reminds me of Pets.com." [View news story]
People need houses. Nobody needs gold.