In between periods of the Frozen Four NCAA hockey I caught the bull vs bear debate between Art Hogan and Michael Metz.
Does anyone else think it is weird that some folks are always on the same side of the trade? Michael Metz has always been bearish no matter what, always! Art Hogan does not stick out in my memory as a perma bull. If I'm right about that, you can substitute Joey Bats or Ned Riley.
All of these guys, one way or another, service clients. I really don't understand how someone can look at all circumstances that arise and always draw the same conclusion, no matter what. How can this possibly meet the fiduciary obligation these folks have. Seriously.
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2 comments:
Considering the long term direction of the market, I would consider the perma bulls to be a little smarter than the perma bears.
Still you are right - you can't always be one side or the other.
I think it comes down to valuations and historical models. A lot of the "perma bears" think that we're within a market like that of the thirties or seventies and that measures of value such as p/e need to descend below their historical averages before a long recovery can occur.
So from that framework there is going to be more fall in the coming years, psychological pressures encourage reading it every event.
The bulls think valuations are ok and maybe hold to nineties assumptions that they're low. People like Kudlow have a huge personal and political stake in success.
So you can't trust either of these groups for medium term predictions. For example the perma bears forget that "irrationality" seems always to go on a bit longer than we believe and the bulls tend to forget that there are big ups and downs even in bull markets.
You chose these people for long term time frames. If you're with the bears you get out, wait for the fall (maybe years down the road) and then put in cash. With the bulls you keep dropping money into the game becausing it's exhibiting it's long term feature as a casino whose averages are stacked in favor of the player.
If you're trying to dance out the shifts of months or a year, you ignore these people because their bias shapes the prediction.
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