In recent weeks some notable market commentators - including Trimtabs’ Biderman and long time bear John Hussman – have turned bullish, or so we have been told. Oddly enough, being bullish these days boils down to a daily or weekly outlook.
In the case of Biderman, he previously stated that “Our definition of a bull market is more money chasing fewer shares.” However, as TheStreet covered yesterday, he now argues that since buyback announcements have waned and insider selling has picked up that his new bull market call is in a holding pattern.
“We have reported many times since last July's initial upturn that after each market rally, corporate buying slowed and selling began. We had hoped this time would be different [but] apparently not. We still think the market is in a bull market...”
As for Hussman, who “increased the equity exposure of his mutual fund from near zero to 72 percent”, he previously noted that since the markets were rising he thought the markets would keep rising. However, he tempered his bullish slant with the statement “it is impossible to form any sort of meaningful forecast even a few weeks or months into the future.” Was Hussman suggesting that now is the time to switch from 0% stocks to 72% stocks, but next week may be the time to move back to 0%? Some enquiring minds may want to know, but the logical long-time bear simply doesn’t care.
Conclusion
In the case of Biderman, Hussman, and countless others, calls for a new bull market have focused around stock market (trading) strength, not on the contention that companies are fundamentally undervalued. Quite frankly, some bears - not to leave out Biggs who went from being bearish to bullish to head up a hedge fund - have tried to embrace the current stock market rally with the ridiculous caveat that everything could change next week. If the investor cannot buy stocks and forget about their holdings for more than a week what good is any ‘bull market’ call?
While earnings have not been that bad -- Chuck Hill notes, “There have still not been any 1Q03 bombs”, and “analysts so far have shown no signs of slashing 2Q03 or 3Q03 or 4Q03 estimates” – in order for the investor to purchase stocks today they nonetheless have to make a bet that tomorrow’s earnings will be exceptional. Until the economy shows sustained improvement this is a difficult bet to make. For certain, yesterday’s larger than expected layoff announcements (for April) is further evidence that the labor market is weak; that the post-Iraq recovery is no going according to plan.
As for Greenspan and Bush, their actions, or lack thereof, will be in the spotlight today, and the Bidermans’ and Hussmans’ will be sure to comment on what they think this means for the markets tomorrow. Yesterday the markets were overvalued, if anyone cares…
"The point at which a competitor is pursuing the best possible strategy, given the strategies of the other participants" - John F. Nash
O Clubeinvest.com informa que nenhuma da informação
aqui facultada deverá ser entendida como conselho ou recomendação
de qualquer tipo de transacção ou investimento.
