Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Plus ça change! The new year starts with yet another equity rally. Another burst of hope. To
me this feels no different from the start of 2011 but with one major difference. Profits are
sliding instead of rising robustly. In the UK there are calls to cut company taxes to help revive
the economy. I may not have a remedy for the current post-bubble malaise, but I do know a
bloody stupid idea when I hear one.
One key lesson from Japan is that an essential ingredient to the end of a long valuation
bear market is revulsion. It is when ‘buyers-on-dips’ become ‘sellers-on-rallies’. It is when
volume dries up to almost nothing. It is the loss of hope. In Japan we saw huge rallies in the
Nikkei on the back of short-lived cyclical recoveries. Each cyclical failure and further new
lows in the equity market saw hope being progressively crushed. Previous US valuation
bear markets typically take 4 or 5 recessions to fully play out. We have only had two.
The market is once again in a hope phase – hoping that the US is now in a self-sustaining
recovery; hoping that China might be soft-landing; hoping that the Greece bailout and the
ECB liquidity polices have settled things down in the eurozone. These bursts of hope are
essential in long bear markets. Essential in the sense that hope must be crushed. It will be
crushed. Hope still beats in the breasts of equity investors. The market will rip out that hope
and consume it in front of investors’ eyes. Only then can the bull market begin.
Talking about pain, having previously shared my experience of an anaesthetic-free
vasectomy, I feel I know what sudden unexpected pain is - link. Standing outside Daphne’s
on my recent sun-seeking hols enjoying my happy-hour rum punch, this plucky crab
proceeded to attempt to remove one of my toes. It hurt far more than I expected but
provided much amusement for my wife. Upon finding he was not large enough to remove
my toe he scuttled under the decking to get his bigger mates out to help him. Cue my exit.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Plus ça change! The new year starts with yet another equity rally. Another burst of hope. To
me this feels no different from the start of 2011 but with one major difference. Profits are
sliding instead of rising robustly. In the UK there are calls to cut company taxes to help revive
the economy. I may not have a remedy for the current post-bubble malaise, but I do know a
bloody stupid idea when I hear one.
One key lesson from Japan is that an essential ingredient to the end of a long valuation
bear market is revulsion. It is when ‘buyers-on-dips’ become ‘sellers-on-rallies’. It is when
volume dries up to almost nothing. It is the loss of hope. In Japan we saw huge rallies in the
Nikkei on the back of short-lived cyclical recoveries. Each cyclical failure and further new
lows in the equity market saw hope being progressively crushed. Previous US valuation
bear markets typically take 4 or 5 recessions to fully play out. We have only had two.
The market is once again in a hope phase – hoping that the US is now in a self-sustaining
recovery; hoping that China might be soft-landing; hoping that the Greece bailout and the
ECB liquidity polices have settled things down in the eurozone. These bursts of hope are
essential in long bear markets. Essential in the sense that hope must be crushed. It will be
crushed. Hope still beats in the breasts of equity investors. The market will rip out that hope
and consume it in front of investors’ eyes. Only then can the bull market begin.
Talking about pain, having previously shared my experience of an anaesthetic-free
vasectomy, I feel I know what sudden unexpected pain is - link. Standing outside Daphne’s
on my recent sun-seeking hols enjoying my happy-hour rum punch, this plucky crab
proceeded to attempt to remove one of my toes. It hurt far more than I expected but
provided much amusement for my wife. Upon finding he was not large enough to remove
my toe he scuttled under the decking to get his bigger mates out to help him. Cue my exit.
No comments:
Post a Comment