Louise Yamada - Bottom Fishing Can Be Dangerous To Your Wealth
For those interested in more scientific aspects to markets, one of my favorites, Louise Yamada, gives an interview with Bloomberg available via podcast. I have to preface her interview with the fact that she isn't going to give away her tool kit but she is going to share her perspectives. They are very worthwhile. Exponentially more so than the stooges at Citi who let her go some years ago.
Louise uses a different tools than I do but it's interesting that her discussion points now match what we have discussed on here since starting this blog. In other words, different analysis is ultimately leading to the same conclusions we drew. This brings up an important point. Most analysis, as defined by today's careers, ultimately develops substantial blind spots and limitations. That is a risk-exposure that nearly no one recognizes. Mostly because the entire world resides within silos or career verticals. This risk-exposure is something that I take advantage of by incorporating these limitations into my work. It doesn't make any analysis perfect but it substantially improves the probabilities of being accurate. The number of people who have a firm grasp of the appropriate fundamentals that actually matter, quantitative analysis that matters, technical analysis that matters and trading systems development that actually matters is very, very, very small. Each of these is a vertical seldom crossed by professionals. Not because it isn't possible. And, not because qualified people aren't capable of it. But, primarily because the reward structure doesn't encourage it and, like rats in a maze, we generally respond to reward as opposed to the search for truth. If you live long enough, you will see every one of those methods of analysis fail miserably. Understanding these disciplines at a core competency level allows one to confirm disparities as either valid or invalid and more aptly to understand how the world works. Where am I going with this? Now that every economist, Wall Street pundit, politician and media talking head is aboard the Titanic, it's time to debunk much of the garbage they have been feeding us. And, it's going to confirm why this crisis will get a lot worse and why globalization is dead. Stay tuned over the next month.
Back to Louise. She is now mentioning our bear market downside target as a potential low. That is, she is now mentioning S&P 400. That said, a little over a month ago we actually changed our potential downside target zone from 400-450 to 200-450.
What I find most interesting in this interview is that Louise is the first person I have heard broach the topic we have discussed before on here. Her remarks are more narrowly focused on the stock market but the spirit is the same. That is, that global wealth creation we have seen over the last ten years is nothing more than a mirage - something you didn't read anywhere else while the world was partying. While she hypothesizes this may be so, it is more than a hypothesis. It is proving to be an unavoidable reality.
We wrote on here four calendar years ago that we very well could give back all of the global wealth created since 2000. And, we followed up last year with possible global wealth destruction targets in dollar terms. The mirage is still deluding those preaching the status quo. The party isn't over. In fact, by some measurements, it's just starting. And, those that believe we are talking ourselves into this are utterly clueless.
Louise uses a different tools than I do but it's interesting that her discussion points now match what we have discussed on here since starting this blog. In other words, different analysis is ultimately leading to the same conclusions we drew. This brings up an important point. Most analysis, as defined by today's careers, ultimately develops substantial blind spots and limitations. That is a risk-exposure that nearly no one recognizes. Mostly because the entire world resides within silos or career verticals. This risk-exposure is something that I take advantage of by incorporating these limitations into my work. It doesn't make any analysis perfect but it substantially improves the probabilities of being accurate. The number of people who have a firm grasp of the appropriate fundamentals that actually matter, quantitative analysis that matters, technical analysis that matters and trading systems development that actually matters is very, very, very small. Each of these is a vertical seldom crossed by professionals. Not because it isn't possible. And, not because qualified people aren't capable of it. But, primarily because the reward structure doesn't encourage it and, like rats in a maze, we generally respond to reward as opposed to the search for truth. If you live long enough, you will see every one of those methods of analysis fail miserably. Understanding these disciplines at a core competency level allows one to confirm disparities as either valid or invalid and more aptly to understand how the world works. Where am I going with this? Now that every economist, Wall Street pundit, politician and media talking head is aboard the Titanic, it's time to debunk much of the garbage they have been feeding us. And, it's going to confirm why this crisis will get a lot worse and why globalization is dead. Stay tuned over the next month.
Back to Louise. She is now mentioning our bear market downside target as a potential low. That is, she is now mentioning S&P 400. That said, a little over a month ago we actually changed our potential downside target zone from 400-450 to 200-450.
What I find most interesting in this interview is that Louise is the first person I have heard broach the topic we have discussed before on here. Her remarks are more narrowly focused on the stock market but the spirit is the same. That is, that global wealth creation we have seen over the last ten years is nothing more than a mirage - something you didn't read anywhere else while the world was partying. While she hypothesizes this may be so, it is more than a hypothesis. It is proving to be an unavoidable reality.
We wrote on here four calendar years ago that we very well could give back all of the global wealth created since 2000. And, we followed up last year with possible global wealth destruction targets in dollar terms. The mirage is still deluding those preaching the status quo. The party isn't over. In fact, by some measurements, it's just starting. And, those that believe we are talking ourselves into this are utterly clueless.
<< Home