Is There Bottom Feeding Of Markets?
Q: As a fried through the scales bottom feeder (you can tell I had a nice salmon steak for supper this evening), I can assure you that there is such a thing as bottom feeding in the stock market. Every time the market is down, down, down, for long enough, and far enough, I start buying buying buying. Unlike many bottom feeders, however, I'm really particular about what I feed on. Gotta be good stuff, actually worth something but propelled downward below net tangible equity by irrational forces, not mere dregs of de facto bankrupts that belong as future sedimentary rocks.
A:
I had no idea, even that the criminal mastermind Greedspan was going
to intentionally plunge the United States into a liquidity trap
with his grossly abusive slashing of the incomes of savers and
investors. Of course I never know how many years nor how far a
given bear phase is going to last (other than by having strong
cyclical evidence
has nearly another fifteen years yet to run).
But as far as having a "shitload of stocks", that's where the
situation has gotten really dicey. Greedspan's criminal theft
scheme of "stock buybacks", which he has been pushing since 1987
just after Raygun/Bush the Elder appointed him to his catbird seat
of criminal influnece, has destroyed the underlying values of far
too many companies. Two Hundred Thirty Five KNOWN de facto
bankrupts as of my current list and that's only among the stocks
for which I have taken the trouble to do detailed balance sheet
analyses. Very few of those de facto bankrupts were caused by any
"business conditions". Vast majority were caused by Greedspan's
criminal looting scam of "stock buybacks" taking all of the equity
out of the companies and transferring it to Greedspan's and the
munchiment's criminal cronies.
Rephrasing: there was so much total trash sinking down to my
level during what you refer to as "3 full years" that, not only do
I not have a "shitload of stocks" but, I'm running the lightest
percentage of stocks to total portfolio that I have ever had for
any extended period of time.
I was interested in your recent remarks about coming in from
the funny damned entrails side of the analytical ballpark to become
a take nickel analyst. With me it was precisely the opposite course
of development. I started my career as a totally technical guy, day
trader even at the earliest stages before the criminal manipulation
during the JFK Assassination. Only one of the take nickel
approaches I ever used was reasonably profitable for me, a systematic
trend following system which worked "for awhile" during the mid 1980s
to about 1991. Certainly none of that Bollinger Band stuff (what
those bands around moving average are called since John Bollinger
was a major promoter of the approach) that you were describing most
recently. In my situation, it was a matter of being *forced* to
look into the funny damned entrails to find out what damage was being
done by the criminal scams of Greedspan and others in goobermint,
then to avoid those stocks most severely looted and gutted and focus
my resources on things with still some viability as real companies,
i.e. the things which still have some buoyancy instead of the
severe detritus destined to become sedimentary rock during this
intentionally created Great Depression II of Greedspan's.
In theory I tend to agree with what you say, but there are serious
negatives trading bonds. I was about to say "especially for a
newbie such as the original inquirer" and then remembered that the
time period when I did the majority of all of the trading in bonds
that I've ever done was when I was myself a newbie back in 1961 to
1964 (mostly convertibles then tradeable on the New York Stock
Exchange which, as I understand it, has since gone out of its
historic bond business--that's what they traded when they first
started--altogether).
But the NYSE being out of the business is more of a drawback
than it sounds at first glimpse. You may know about my general
thoughts on under the counter trading as expressed in
http://shell.dimensional.com/~bgrumbin/NASDAQ.htm