A Dash of Insight

Is This a Tradable Bottom?

We have had some inquiries about our "Gong Model."  They say that no one rings a gong at the bottom, so our marketing department thought this was a cool name.  This article showed a good description of the last time the Gong sounded.

Many traders are seeking "oversold signals" and calling the bottom.

The Gong is not now signaling a bottom, and it is not close.  The Gong model has two parts.  First the hammer must be drawn back, and we are not yet at that stage, nor close to it.  Second, the mallet must come forward.  We'll provide some updates.

Can We Be Wrong?

Of course.  We can certainly be wrong.  If tomorrow's payroll number is surprisingly good, given the +/- 100K confidence interval, the market could rally by a couple of hundred Dow points on a report showing surprising strength.  Our report on The Gong, and other methods, are available to readers on request.

Our intermediate-term outlook has grown increasingly bearish over the last month or so, as documented in our participation on the TIckerSense blogger sentiment poll.  We have reported this both there, and on the weekly updates of our TCA-ETF system.

It is entirely possible that we will have a rally without The Gong.  Also, the gong model gives an entry signal, but not an exit.  We have searched hard for the ultimate bottom-calling method, but we are realistic.  It is not easy.

The Importance of Time Frames

While our system signals have been negative, we have been less convinced by the fundamentals.  In our programs, we have the system (affectionately called the "Vince Model") and the fundamentals, (called the "Jeff Model").  The time frames are different.  The "Jeff'" model is geared to the long-term investor and has a great long-term record.  It is thematic, and the themes have worked over a period of more than ten years.  It is not a trading system, although we obviously try to find the most promising stocks and sectors.  We currently believe that people have become far too negative about the economy and economically sensitive stocks.  Vince sees more pain in the near term.

Readers may be interested in our discussion of the importance of time frames.  We also have written about how a single trade can have two winners -- those who have different time frames or investment objectives. It is not just a question of the immediate stock reaction.

Conclusion

In a difficult market it is important to have one's primary objective in mind.  Traders and investors can reach different conclusions.  One theme is the reaction of the individual investor -- scared out at market bottoms.

Is this the bottom?  Probably not, but that does not mean bailing out of one's retirement account.  We have a nice list of attractive stocks with good valuations.  When the Gong sounds, we will get more aggressive.

Bad News on Housing

We continue to believe that the Dodd/Shelby housing bill is important for financial stocks and the market as a whole.  Yesterday's 83-9 vote on cloture, the Senate process for limiting debate, seemed to signal passage.

After the market close today it became apparent that there are additional hurdles, suggesting that  the bill will not pass before the July 4th Congressional recess.  One Senator, John Ensign (R-Nev) is using the full range of arcane Senate rules to block the bill.  Sen. Ensign wants to add an amendment concerning tax credit incentives for renewable energy.  The problem is that the House has already rejected this non-germane amendment.  Allowing it would also open the door for many other non-germane amendments.

The sponsors insist that the measure will eventually pass, even if brought back after the July 4th recess.  The markets are not very patient on issues like this, and the potential for a Bush veto remains.

Our own feeling is that if the bill passes,  the President will face extreme pressure to sign it.  The measure has overwhelming support in both parties.  Legislators campaigning this year will want to show that they were helping distressed homeowners.  Some of the key Republican states are those most affected by foreclosures.

Please note that we are doing market analysis here -- not an assessment of the merits of the legislation.  Many market pundits seem willing --even eager -- to see a complete cratering in housing prices with the fancy name of "price discovery."

We shall return to the merits of the legislation at a future date.  For now, we suggest that investors considering banks or other financial stocks should keep this development in mind.

And meanwhile -- note how a single Senator had the power to block legislation that had the overwhelming support of both parties.  It is a lesson in how difficult it is to pass a bill -- a subject from one of our classes in the old days.

Housing Bill Veto Threat

There is a threat to the housing bill that has been moving through Congress.  It is important, and attracted little market attention today.

Background

The House passed an aggressive version of housing relief, led by House Financial Services Committee Chair, Barney Frank (D MA).  The Senate went through a negotiating process, with Sen. Richard Shelby (R AL) acting as the spear carrier for the Bush Administration.  Shelby succeeded in negotiating a compromise with Sen. Banking Committee Chair, Christopher Dodd.  The compromise bill cleared the committee on a vote of 19-2.

In the normal course of events, the bill would be passed by the Senate, since it has strong bipartisan support.  Many key Republicans represent states hard hit by potential foreclosures.  The next step would be a conference committee to reconcile the differences with the House version.  The plan was to complete legislation for President Bush's signature by July 4th.

Today's Developments

Today's story, breaking from various sources, got little attention during trading.  To the surprise of most (since Shelby had already used the Bush veto to exact various compromises) the Administration announced opposition to the Senate measure.  This bill was more conservative than the Frank version from the House.

Influencing the decision was information suggesting that some key officials, including Senators, received favorable loans from Countrywide.  Some analyses of the legislation suggest that Countrywide will be unduly assisted by the legislation.  There are many articles on this subject, but we recommend the very objective reporting from CQ Politics.

Our Take

At "A Dash" we have emphasized that solutions to the housing problems will not be a single comprehensive solution.  Instead, government works in incremental fashion, addressing one aspect of the problem at a time.  Some of the increments are in place, but this bill is an important addition.

As usual, we urge readers to put aside personal opinions about the  merits of the legislation and consider the market impact.  That is our mission.

This bill would help to stabilize housing demand.  There has been a lot of attention paid to housing supply, but there is also latent demand.  Most observers believe that some buyers are waiting to see stability.  Others need some help in qualifying for loans.  For these reasons, the measure is expected by most to help the housing market in an incremental, but important fashion.

A Presidential veto would be a negative for housing, credit markets, and the stock market in general.  It is possible that a scandal involving leading Senators could either delay the Senate passage, the conference committee action, or passage of the resulting bill.  It might also provide justification for a Presidential veto, especially since the lame duck Bush Administration may not be fully aligned with the GOP election needs.

If the political turmoil derails the legislation, we view this as a serious negative for US stocks.  If the issue is not resolved soon, no action will be taken before the election.

It is a strange fact of our political system that the implications for specific individuals and companies may outweigh a general concern.  One is easy to describe and makes good election fodder.  The other involves a deeper understanding of economic effects, one that eludes the grasp of the average voter.

One Trade, Two Winners

For every stock trade there is a buyer and a seller.  Depending upon what happens, there is also a winner and a loser.  Is that the whole story?

Background

Occasionally the Old Prof accepts a gig as an expert witness in a legal proceeding.  One of these occasions involved an interesting situation.  The company in question was dramatically affected by certain economic events.  Were this not true, there would be no story and no court case!

The events in question sent the stock lower, much lower.  One of the questions in front of the court was whether the stock continued to be a suitable choice for those administering the portfolio in question.

How Laymen Decide

It is pretty easy to guess how the average person looks at this.  Guess what?  Judges and juries are not much different.  If a stock goes up after the trade, the buyer was right, and the seller was wrong.

There is little understanding that a correct decision in an environment with many unknowns may result in a losing answer.

Briefly put, the concepts of "correct" and "winning" mean two completely different things.  There may be an overlap between the two sets, but they are not identical.

How Experts Decide

Experts, including regular readers of "A Dash" know better.  It is important to think in terms of risk-adjusted returns.  One example might be a biotech company that is about to announce the results of an important drug trial.  Suppose the stock is trading at $4/share and will either move to $18 or to $1.50 depending upon the results.  There is a simple calculation to determine the expected success required to justify the current stock price.  That might be a valid price for an investor able and willing to make many such trades.

Even if that calculation showed the stock to be substantially undervalued, the investment (speculation?) is not suitable for everyone.  Playing with one's retirement or the kid's college fund is not advised.

To summarize, let us suppose that the company circumstances changed suddenly and dramatically.  Let us further suppose that the stock value, on an expected value basis, was attractive.  It could still be correct for risk-averse investors to sell, and those able to assume more risk to buy.

Both sides of the trade are correct, regardless of what actually happens to the stock.

Opportunity Cost Differentials:  Another Example

Let us suppose we faced a pure arbitrage situation.  There is a deal that is 100% certain to close (or as near to that as we can get).  The only question for the investor is whether to hold the position until the deal is paid off, or to accept current prices and move on to a new trade.

The answer varies with the investor!  It depends upon what alternative opportunities have been presented, and perhaps even on the interest rates they have negotiated with their banks.  It may be quite correct for one party to sell and another to buy, the position moving to the party with the lowest opportunity cost, and (perhaps) a higher risk tolerance.

Time Frames:  Another Example

The most difficult application relates to time frames.  Let us suppose that you were asked to make a single investment decision right now.  You were not allowed to change your position (unrealistic, but bear with the example for the moment).

The question is whether to buy the S&P 500.  You will be judged over the following seven time frames:

• One minute
• One hour
• One day
• One week
• One month
• Six months
• One year

In practice, anyone can and should change opinions with the circumstances and facts.  Having said this, at any moment the answer might be different depending on the time frame.

My colleagues at RealMoney make a lot of market forecasts.  Sometimes their disagreements are not really about the fundamentals of the market, but about time frames.  Today, for example, Doug Kass was bullish in the short term and more bearish for the intermediate term. He has even instituted a quantitative rating system, a nice touch.  As regular readers know, we have great interest in his trading calls, especially when he sees a bullish signal.  Bob Marcin, another of our favorite commentators turned more bearish.  After some discussion, (subscription required for all of it) Bob wrote as follows:

	Robert Marcin
	Back To Dougie
	6/17/2008 11:26 AM EDT

Clearly we have different definitions of time frames. This is an intermediate call and that means the next 6-9 months. My definition of short term is less than 3 months, but not daily. You go all in and reverse in a day. We might be more on the same page than you think.

The key point is that both may be making an accurate prediction, given their respective time frames.

Our Take

Time frames are absolutely crucial.  Our own market view is bullish over the rest of the year, but bearish for the next month, based on our TCA system.  We do not make major adjustments in long-term accounts based upon our one-month forecasts, but we use it for "leans" and entries and exits.  We occasionally make intra-day trades when circumstances warrant.

The Result

Two parties can make a trade based upon different time frames, and both can be correct.  Even a single investor using multiple models may get conflicting signals.

The success of a strategy should be evaluated based upon the specified time frame, the acceptable risk, and other factors.

An Interesting Question

Much of the trading volume is now based upon systems where trading success is measured in minutes or even seconds.  Monday's volume was about 25% lower than expected, widely attributed to the exciting conclusion to the U.S. Open playoff.  This means that many traders left money on the table by watching golf instead of implementing their normal strategies.

What was the opportunity cost of the golf tournament?

Important News on the Housing Bill

When something important happens, with potential market effects, we interrupt our normally scheduled programming for an update.

We intend to publish the answers to the economics quiz and to announce the winners.  Meanwhile, potential entrants have another day to win this prestigious contest!

The Housing Compromise

At "A Dash" we have written a series of articles on  housing problems and possible solutions.  Since the government steps have been incremental in nature, the market has not really responded.  At some point, there will be a realization that something important has happened.

Last week we pointed out that investors should be watching Sen. Richard Shelby as the indicator of a real compromise.  A Senate Banking Committee compromise was reached today.  While there are more steps in the legislative process, we see this as the real hurdle.

The Significance

We note with interest the opinion of Nouriel Roubini, an outspoken bear on the housing situation.  In two articles, Roubini discusses the merits of the proposal and responds to critics of his viewpoint.  Here is a key portion of his argument, but readers should consult both articles.

Very few reflected on the substance of this proposal and its strong economic logic that would benefit borrowers, lenders and even the government as the fiscal cost of no action (a systemic banking crisis that would trigger a costly fiscal bailout of banks given deposit insurance) is much higher than the potential modest fiscal cost of this proposal.

Conclusion

This is good news for the housing market, the economy, and the stock market.  We shall delve more deeply into the proposal and the effects in future articles.  We shall also examine the reactions of economists and prominent bloggers.

UPDATE, 5/20/08, 1 PM CDT

The editors at TheStreet.com have kindly moved my article on the Frank/Dodd legislation to the non-subscription portion of the site.  Readers of "A Dash" can check out this article for insights from Doug Kass and Jim Cramer, the description of the remaining steps before it becomes law, and the reasons I believe President Bush will sign the legislation.  The process is going to take another six weeks or so, but it will get more attention before then.

Test Your Economics IQ

Stocks can and do stray from valuations suggested by fundamental analysis.  Despite this, it never hurts to understand the economic background.  Understanding the economy helps to gauge earnings forecasts.  This is especially important for stocks with a cyclical character.

Here are some statements about economic data and the market.  For each statement you need merely to decide "true" or "false".  We are not trying to serve up trick questions, but sometimes those citing the information do so in a tricky way.  It is up to you to see through this!

The Quiz

1. Home prices are now deflating at a 32% annual rate, versus 8% six months ago.
2. Inflation, as measured by the CPI, shows housing costs to be increasing according to the "imputed rent" formula.
3. Planned corporate layoffs rose 68% in April to a total of over 90,000.
4. As long as the largest asset on household -- and bank -- balance sheets continues to deflate, the credit and consumption hits will keep coming.
5. The US economy created about 2.5 million new non-farm payroll jobs last month.
6. The TED spread is now at 86 bp's, down from 204 in mid-March.
7. The Baltic Dry Freight Index has plummeted, showing global economic weakness.
8. The Fed has devoted about half of its balance sheet to "unusual" liquidity efforts.
9. The BLS Birth/Death adjustment has reduced past predictive performance, as measured by actual state employment counts when the data became available (months later).
10. Household liquid assets at $21.9 T and net worth at $31 T are about 1% below the all-time records as of the most recent published data.

Answers

Many wise and regular readers of "A Dash" will do well on this quiz.  We will recognize the best scores submitted by email (note the link at the top left).  Please do not show off by making your answers in the comments!

There will be ample time to discuss and disagree when we publish the answers.

Scooped by Muckdog

On our blog agenda there is a discussion of the "alternate data universe."

There is a rich and thriving discussion of economic data among economists -- that would be the "real economists".  We are talking about those who are (preferably) in the academic world or working on Wall Street.

There is another discussion.  It occurs mostly in the cottage industry of those making a business of criticizing the official government data.  As we have noted, government is an easy target.  The only representatives who speak in public are the political actors.  The hard-working, non-partisan, intelligent staffers do not have any access to the media.  That makes organizations like the BLS an easy target.  They are not paid to go on CNBC.

Attacking the non-farm payroll report, GDP, or inflation data is an inviting target for the gonzo-economists, the non-economists, and those with a paid-site business model.

We were looking for a way to describe this "alternate universe" and even had the Twilight Zone in mind, but we were scooped by Muckdog.  (Regular readers of "A Dash" sometimes ask why we recommend Muckdog, with whom we have never spoken, when his source seems to lack the official credentials we admire and is also anonymous.  The answer is simple.  We are not advocates of credentialism.  We do hold anonymous sources to higher standards of helpfulness.  We include them among featured sites when there is a real investment payoff.)  Muckdog gets to the point much better than we would:

From Barry Ritholtz:  GDP Alternate Measure. It's the whole conspiracy theory thing about understating inflation and overstating GDP.  Maybe "alternate universe?"  Sure, but those make for good Twilight Zone and Star Trek episodes, no?  And Barry's always a good read.

The Choice for Investors and Traders

It is pretty simple.  One can go into the Twilight Zone where no official report means anything -- there is always something wrong.  The prime source for this, which we will not link to, is a paid site on a mission.  The serious economists do not cite this source.  The bearish non-economists frequently do so.  The mainstream media, with a couple of exceptions, do not travel this path.  It is a trail which requires certain dubious assumptions:

• "Government" is some unitary actor, like the manager of a business, with a mission of punishing certain people -- mostly senior citizens, in an effort to cut costs and balance the budget.
• The Boskin Commission was some sort of conspiracy with this aim in mind.
• Various Administrations and the Fed have joined forces to foster this approach.

In the beginning government classes students learn that we have a pluralistic society.  Many different interests are represented, and quite effectively.  Senior citizens have a special  pull with Congress, since they represent a powerful voting block.

In fact, the Boskin reforms, discussed in a bipartisan Commission, have been reviewed by economists.  If anything, the adjustments to CPI are still inadequate.  CPI remains overstated.  As we have noted, that is what the Fed believes.

Investors have a simple choice.  They can choose to follow the alternate universe, where  everything has gotten  much worse over many years during a time when wealth increased.  This is an ideological choice, not an investment choice.

Alternatively, investors can accept the debate among real economists, those trying to generate accurate data, and those offering real public policy alternatives about economic issues.

Conclusion

Like the many economic sources available on the Internet, we are not going to engage in a debate on specific calculations.  It is too time-consuming  to fight this battle when the alternative universe has this as a single-minded mission.

A trader or investor who wants to profit is well-advised to deal with the data generally accepted in the economic and investment community.  If no one with real credentials chooses to engage in a discussion of the findings, that is meaningful and should be respected.

An Anecdotal Afterthought

Our mission at "A Dash" is helping investors and traders.  We were in some doubt about whether this was an important issue until we had a recent visit from one of our most intelligent and informed investors.  He asserted that some of these issues were "controversial."

We were surprised.  We suggested an analogy of the debate over cold fusion.  This theory, suggesting a potential for vast energy creation, was almost universally disputed by a broad spectrum of scientists.  Nonetheless, it won popular support, some grant money, and some academic followers.  This was a controversy principally among non-scientists.

There is plenty of room for debate over data and findings.  Unless you are yourself an expert, your mission should be in discovering and following the real experts.

That is what we do at "A Dash."

Sell in May?

There are many Wall Street adages.  Some seem to have predictive power, including the idea that one should "sell in May and go away."

Such slogans have extra influence because of the catchy, alliterative qualities.

When Indicators Conflict

There are a number of conflicting adages at the moment.

There is the Presidential Election Cycle. We have not been big fans of this because the causal model is elusive.  This year, however, we have both the Fed eases and the stimulus package.  If ever the theory were to work, this might be the time.  We also note that the popular bearish commentators embraced the theory when it suggested market weakness, but have fallen silent during the period when it suggested strength.  This should be interesting to contrarian investors.

There are technical considerations.  Can the market break through apparent resistance?  That is the current battleground for traders.

There is the question of earnings forecasts and targets.  First quarter earnings and outlooks were not as gloomy as expected.  Financial writedowns?  Yes.  Other companies?  Not so bad.  It was an unexpected double-digit gain for non-financials.

Summing up the Prospects

Two of our favorite sources provide some insight.

Bespoke Investment Group notes as follows:

Bespoke readers might remember that Goldman got rid of bullish strategist Abby Cohen when the market was cratering in March.  Cohen had a 2008 price target of 1,675 for the S&P 500, and after replacing Cohen at the market's bottom, Goldman's new strategist (David Kostin) lowered the firm's year-end S&P 500 price target from 1,675 to 1,380.

Readers should check out the entire article.  The Goldman economics team is very bearish and that has now expanded to their strategist team.  These are often quite different within a single firm.  This is a classic case of "global strategists" versus bottoms up analysts.  It bears watching, but regular readers of "A Dash" know that we think the bottoms up guys are under-rated.  Everyone is still fighting the old war of the 2000 tech bubble when companies and analysts hyped.  When will we learn that the world is different now?

Muckdog wisely highlights some research from Sy Harding via Mark Hulbert.  The gist of the story, which you should read for the full account, is that the "sale date" might be delayed this year.

That is consistent with our current model output, and our sense of the fundamentals.  To check this out, readers might wish to revisit this article, from April 3rd.

And by the way ---

What happened to "Don't Fight the Fed"?  We highlighted this as a "top secret" investment opportunity -- early, but not wrong.

Understanding LIBOR

In the last week there has been a rather big flap about LIBOR rates.  It is a very serious matter.  The Wall Street Journal pointed out a week ago that these rates might be misleading.  There have been various stories following up on this and noting the defects in the method of calculation and the implications for US markets.

We believe that the stories capture neither the significance of the implications, nor all of the possible reasons for the problem.

Four months ago we worked on this issue.  While we urge readers to revisit the entire article, here were some of the key points:

Readers need to know the following:

• Much of the popular discussion of LIBOR moves relates to other currencies, not dollars.
• The relevant discussion of LIBOR rates in US dollars pertains to so-called "eurodollars."  These are dollar deposits held outside the US (not necessarily in Europe).  These deposits are 20%+ of total dollar reserves.
• The rate is determined by a panel of banks trading in eurodollars.  They are big players in this market, but not necessarily US based banks.
• There is only a loose arbitrage between Eurodollar trading and rates in the US.  Many of the banks involved cannot move between the two markets, for example.
• The LIBOR rate most important to the US housing market is the six-month maturity, linked to some ARM's.  This is not the rate that you read about most frequently.
• US investors can trade Eurodollar futures at the CME. Many people do not understand that this is an interest rate instrument with very deep liquidity and a history of over twenty-five years.

The implications for the CME Eurodollar market are just as important as that for various business and mortgage loans.  No pundits seem to have noted this, but you can be sure the Merc traders have.

A Possible Reason

At the time of the original article, we were exploring the idea that US banks had adopted FAS 157, mostly doing so in advance of the deadline of November 15th, 2007.  Meanwhile, international accounting standards differ.

What if banks are concerned about disclosure, more confident in those who have adopted the US accounting  standard?

We tried to generate some exploration of this idea last December, but without much luck.  It is not a topic that hits the "sweet spot" for the leading economists on the web, and emails to specialists did not engage their interest.

Now it may be different.

Felix Salmon raises the question, as follows:

Are European banks significantly riskier than American banks? Looking at RBS's decision to raise $24 billion in new capital, it certainly seems that way: the move will take RBS's tier-one capital from a normal-for-Europe 4.5% up to a normal-for-the-US 6%.

And so it's maybe not surprising that US interbank borrowing rates are lower than European interbank borrowing rates. The spread at the moment is 4bp, which is significant enough, but Carrick Mollenkamp reports that it could widen further, to as much as 10bp, as Libor continues to widen out to reflect reality rather than wishful thinking.

He wonders whether there is a need for an interbank rate based solely upon US banks.

This has very far-reaching implications.  Most importantly, why should various loans in the U.S. which do not involve non-US banks use this rate?  Existing contracts, of course, cannot be changed.

We expect to see much more on this topic.

Traders, Plans, and Systems

Regardless of time frame, anyone expecting investing or trading success needs a plan.  Two of our favorite and featured sources -- Dr. Brett Steenbarger and Bill Rempel -- take apparently different viewpoints in a discussion about discretionary trading versus system trading.

It is a constructive discussion.  Somewhat to our amazement, we found ourselves agreeing with nearly all of the twenty-two bullet points in both lists.

There is plenty of good advice, so we encourage readers to check out Dr. Brett's A Few Trading Psychology Observations.  He mentions some lessons from his most recent book which we reviewed a while back.  We have recommended the book to those engaged in various performance activities, not just trading.  (Now if I can only get my autographed copy back from that bridge expert in Wisconsin who walked off with it!)

Bill Rempel is actually much closer to what we do.  His observations characterize the approach of the careful and disciplined system trader.

It is a delight to read these articles back-to-back and we encourage you to do so.

The Trader

Here is a crucial point from Dr. Brett's list:

A sizable proportion of traders who have been having problems are trading methods and patterns that used to work, but are no longer operative. The inability to change with changing markets affects traders intraday (when volume/volatility/trend patterns shift) and over longer time frames (when intermarket patterns shift).

And following this up, he notes:

Traders develop plans and trade patterns that simply don't work; they're based on randomness. When the patterns don't work, traders become frustrated and abandon their plans. So it looks like lack of discipline causes trading failure. But planning doesn't create success; sound planning does. Sticking to plans based on randomness is no virtue.

The System Guru

Bill Rempel does a fine job of describing the approach of the system developer.  It is almost like listening to our own Vince Castelli.  Bill writes:

Systems can be optimized to work in one market regime, with a signal or overlay allowing the system to switch when regimes change, or the systems can be optimized to work “overall” regardless of the particular regime in place at the moment. The significant downtime that systems traders have (since they’re not watching the market every minute) allows them to step back and take a look at longer-term market patterns.

Bill has confidence in his plans because they are tested and proven:

Sound planning, i.e., BACKTESTING, is the basis on which the systems trader approaches the market. Not only are the plans based on sound market analysis, the plans are EASY TO STICK TO, because the system trader has REASONED CONFIDENCE in its backtesting.

Our Take

We have only provided a sample of the observations.  We strongly recommend that anyone who develops models or engages in discretionary trading should read both articles several times. 

Unfortunately, most people who should be reading this exchange will not.  This includes the audience that we think about the most these days, all of the people who have been convinced by television commercials that they can be great traders.

Meanwhile, our own conclusion is that there is less difference between the two approaches than one might think at first.

The trader needs to have a real plan -- one that has been tested and proven.  Then he must stick to it.

The system trader may not view the system signals as mere suggestions.

At the risk of oversimplifying this discussion, we sense that both viewpoints lead to a similar place.