Friday, June 11, 2010

Da Bears

Here is the cover of the latest issue of Businessweek magazine. The cover story tells us that the perma-bears who called the crash of 2008 may be about to have their day once more.

I have found that when the news media highlight the views of of money managers or market gurus those views are about to be proven wrong by subsequent market actions.

I think this cover story is another piece of evidence that the current market juncture (S&P 500 closed yesterday at 1087) is a big buying opportunity for the aggressive contrarian trader. Of course aggressive contrarians who have been following this blog and the methods of my book are carrying an above average long position from the S&P 690 level for more than a year now. So for them no additional action is called for.


  1. I bought your book last year, and have been following the strategies therein. I moved my retirement account to 66% "safety" in late December (one week after Bernanke appeared on the cover of Time magazine), and have moved it back to 66% "risk" on Tuesday (which hopefully coincided with a near-term low).

  2. Here's what Steven Hochberg over at Elliot Wave had to say about this cover:
    "Finally, next week's Businessweek cover sports a growling picture of a bear, with an accompanying article that touches upon the current handful of market bears and their views (through the author's prism). Taken at face value, this cover would carry a bullish stock market message. However, the accompanying article has a somewhat dismissive undertone, with questions that ask whether the respective bearish views are "a kind of crisis shtick." It even seeks out a professor of psychology who tries to "explain" why a pessimist is a pessimist. The author then wraps up by saying, "Some bears understand that — and are trying hard to change." It's as if expecting a financial market decline, which is a natural occurrence, is somehow abnormal. In my opinion, it appears hard to draw a strongly bullish conclusion from this cover and attendant article. The unfolding wave structure will have the final say."

  3. Before I believe it, I need to see some evidence that supports the success of the "cover story" indicator. My impression is that Carl and others just subjectively pick the covers that suit their market view. An objective approach would include a fixed list of magazines and *every* stock market related cover story.

  4. this column mocks the bears as you can see from the cover; it is not the best example of a contrarian indicator. However, on balance I my equity position has increased on this pull back, on the basis of asset allocation alone, let alone other considerations.