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« Weighing the Week Ahead: More Noise than Signal? | Main | November Employment Report Preview »

December 04, 2012

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RB

Jeff,
Not sure where my previous comment disappeared. Anyway, as the year comes to a close, I wanted to give you credit for being early in disputing the ECRI call particularly given your favorable review of ECRI in the past. Your articles and sources have been very useful to me in this regard.

RB

Jeff,
I'm sure we will eventually have a recession. But as the year comes to a close, I give you credit for being one of those (along with the Bonddad blog) who were early in disputing the ECRI recession call. I too am dismayed by their refusal to admit their incorrect calls, after being respectful of their past record just like you. Your articles and the sources you have been highlighting have been helpful to me in this regard.

oldprof

Pacioli -- It is pretty obvious that you have not read much from my recession series, since you see it as irrelevant.

If you do choose to read it, I hope you will see why it is important. Nearly every investor asks me about 2008-style dangers. The methods that I have worked to develop are the best defense.

To summarize in a few words: Understanding recessions defined in NBER terms helps us dodge the times when earnings fall by 50% and also to know where we are in the business cycle.

I am also surprised that you are giving the ECRI such an easy ride. You look at the most recent appearance and judge it to be balanced. If you go back and check out the entire history of the ever-changing ECRI position, it seems plausible and balanced on each occasion.

By contrast, I have identified the best recession forecasters. You have valuable information available for free. You probably never would have heard of these sources otherwise. At some point they will provide us with a warning. Until then we are indeed free to find good stocks, even when the economy is growing below trend.

Knowing where we are in the business cycle improves that process, so that will continue to be a major theme for me.

Jeff

Pacioli

ECRI appears fairly measured and balanced in this clip, http://bit.ly/WPVcZH , wherein he explains his reasoning for arriving at the conclusion that we are probably in recession now.

Even if you disagree with that assessment, it seems like the whole point of whether or not we are actually in a recession or not is so much less relevant than would be indicated by the volume of words that have been splattered on that topic on this site lately.

Which is to say, plenty of indicators (employment, stock market) can and do flourish even during a recession. Likewise, performance of the economy and markets can and do stagnate even while we are not technically in a recession (see the last 2 years).

So, the bottom line is - who cares if we're in recession or not? For investors, we just need to focus on picking the right securities.

Just my $0.02.

drewburn

Nice, very well said. Love your stuff. Thanks.

Shelby Chien

I could not agree with you any more. Shanghai index jumped high 3% yesterday, and CAT holds its small gain this morning. One comment about CNBC, it has become a little sister of FOX news. It misleads the investing world like FOX news misleads USA publics. Clowns, like Kudlew, Santelli and Bartiromo should be thrown out CNBC because they are damaging CNBC. As I know, not many investors watch CNBC now.

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