Comments on: CREDIT SUISSE: BUY THE DIPS – THE BEAR ISN’T HERE YET

By: LZ

LZ — Wed, 03 Feb 2010 05:24:49 +0000

A lot of smart people subscribe the thoery “social mood shapes fiancial market”. It may not be true all the time but it is true sometimes. Angry people could do a lot of harm than good to society, just watch out. Next time when crap hits the fan it will not be contained in financial market.

I think most people subconsciously figured out all these “recovery” “growth” stories after 2000 are part of a scheme to transfer their waelth away, to a few nations with resources and producing goods. a few uber rich could also make money to charge transaction fees.

Bullish? sure, it is dead bullish but who cares?

By: Our Man in NYC

Our Man in NYC — Wed, 03 Feb 2010 04:44:07 +0000

I agree with TPC; the CS guys are good — I’d put them up there with Edwards (always makes me think, but strategic not tactical), Janjuah (bearish), and Rosenberg (only on US-centric stuff though).

As for strategists; I think it’s a pre-requisite for any kind of downturn for them to be largely bullish, since if everyone’s expecting a downturn then it isn’t going to come. The fact is picking any turning point is very difficult (and big bank strategists are not paid to do it!) and we likely won’t know enough to confidently predict a V or W or Square-Root until at least March (and in truth probably well into Q2)…

It’s also why, if there is a downturn, I suspect there’s a good chance it will go way further than people are prepared to consider.

On a separate (but related issue) — what are people’s thoughts on Gold. I’ve pretty much come full circle, from being a bull to being a bear (in the short-mid term at least). After all, surely a prerequisite for an instrument to perform well in a flight to quality scenario…is that nobody wants to own it before that time?

By: TPC

TPC — Wed, 03 Feb 2010 02:17:14 +0000

That’s just not factually true. Money market funds remain 24% of market cap vs. the 18% historical average.

Besides, I would argue that the cash levels are not the important factor here. It’s the sentiment levels that really matter and they are still low. A mountain of money has moved into bonds in the last year. If sentiment continues to improve that cash will slowly trickle out of bonds and into equities.

By: anon

anon — Wed, 03 Feb 2010 02:09:58 +0000

I think average hedge fund is fully invested (150% gross, 30-40% net), Mutual funds obviously fully invested.

Quite frankly no fund mgr listens to these strategists. Most i know are very long, thinking good 1H and bad 2H.

But, sometimes consensus is right. We may rally in 1H and then collapse. The smart ones will get out at 1175 and not wait for 1200+

By: TPC

TPC — Wed, 03 Feb 2010 01:55:48 +0000

I should add – most strategists are actually calling for a sustained rally thru H2 and for the market to end much higher. The only two I know of who are actually calling for YoY declines are CS and MS.

By: TPC

TPC — Wed, 03 Feb 2010 01:54:17 +0000

Who is actually positioned for that though? Last week everyone was selling everything. Now everyone is back on the recovery bandwagon. Sentiment, commitment of traders, cash levels, etc all say investors are still not positioned for a sustained rally.

Talk is cheap. The actual positions flip flop every week and in the longer term remain net short/cash heavy.

By: anon

anon — Wed, 03 Feb 2010 01:48:21 +0000

TPC – i hear every strategist on the street saying the same thing. 1H better due to stronger earnings, less policy risk, better comps etc. 2H worse due to worse comps, closer to rate tightening etc.

So if everyone agrees to that and buys now .. who do we sell it to in mid 2010?

By: TPC

TPC — Wed, 03 Feb 2010 01:34:52 +0000

It’s really interesting too….I absolutely love Garthwaite’s equity team at CS. They are top notch. If I had to pick two or three analysts to read they would be on the list. Their research truly is some of the best. So it’s interesting to see a piece of their research be received so poorly.

There is this broad belief that if a big bank puts it out, it must be bad….Hating Wall Street’s most influential people won’t get an investor anywhere….I would just ask the reader to keep a more open mind. Sometimes it’s the worst research that gives you the best ideas….

By: TPC

TPC — Wed, 03 Feb 2010 01:27:06 +0000

I try to emphasize emotionless investing, yet I still notice it here. No one likes a bullish story. I get it. I am frustrated at what the government has done, but like you said, the market could care less about what we think.

By: nkyhilljack

nkyhilljack — Wed, 03 Feb 2010 01:23:21 +0000

One of the most difficult tasks we face as traders is to realize the market doesn’t care what we think. Regardless of whatever indicators or technicals we may subscribe to, the market can remain irrational far longer than we can remain solvent. I think the frustration for most traders comes from wanting the market to prove our position, be it bullish or bearish, so we can bask in the glory of being right. I hope to get past being right and focus on being profitable.

One of the reasons I enjoy your site TPC is you force me to consider opinions which differ from my own. Keep up the good work.