October 25th, 2012

Maria Misses the Big Picture

Maria Bartiromo lambasted Greg Smith’s controversial book and his criticism of the culture at Goldman Sachs.  But, if you read the transcript carefully, you see that it was actually an op-ed piece about her placing the blame of the low participation on the part of individual investors in the market these days squarely on Wall Street practices.

She may also have been trying to place blame for the drop in the viewership of CNBC also on the absence of individual investor participation and, by inference, at Wall Street’s shenanigans.  In a recent NY Daily News article quotes CNBC execs as saying that

“the cable business channel are “freaking out” because viewership levels are down essentially across-the-board, particularly with its marquee shows, “Squawk Box” and “Closing Bell”. Their biggest attractions have become their biggest losers.”……..


The network has already moved to revive “Closing Bell.” On Friday, CNBC announced it had poaching “Cavuto” exec producer Gary Schreier to take the helm of Bartiromo’s show.  According to the Nielsens, “Closing Bell” is also seeing its third straight quarter of decline.


From April 2011 to April 2012, the show is down 16 percent in total viewers and 11 percent in the 25-54 demographic.

“Maria gets good interviews, but she’s also not creating enough buzz,” says the insider.

It should be noted, that the Murdoch empire owns the NY Post, a Daily News competitor and also has the Fox Business News Network and delivers “Your World with Cavuto” on the Fox News Network.  But back to Maria’s rant.  In her op-ed piece, she claimed that

“there are issues in the [Wall Street] community.  Why else has the retail investor left the party?  trust has plummeted between the financial crisis, flash crashes, trading glitches and debacles like the facebook ipo, it has taken a toll on the retail investor.  bottom line, clients should be the priority, integrity should be the goal even at the expense of profitability, so books like these will not help.  it’s time for wall street to work overtime if and when that trusts returns, we all know that will help a lot more than just wall street.”

Where has Maria been for the past 10-12 years?  Has she had an opportunity to do more than merely repeat the day’s screaming headlines to actually see how truly abysmal the market’s performance has actually been during the secular bear market of the past twelve years?  True, there has been extreme, volatile long-term moves of 100% to the upside and 50% to the downside.  But in the end, the market is just about where it was in 2000.  The absence of individual investors probably has more to do with the Afghan/Iraq wars, the housing/financial crisis and failed Congressional/Executive leadership than it does Wall Street’s failures or excesses. (image from post several days ago, Important Stock Market Supports)

With the market failing to deliver any positive news, why should the small investor participate?  Why should they watch CNBC?  And, I might add rather selfishly, why should they read this or any other blog?  My hope is the the market does successfully break across the all-time highs not only because my investments will again be able to easily show some significant gains but also because my readership will jump and I’ll be able to sell more of my book.

Don’t loose hope; keep your chin up.  Contrary to the bearish views of many observers and Maria’s rather narrow view of Wall Street behavior being the culprit, the book’s final chapter is entitled “Where to from Here?” and it offers a fairly optimistic view of the market’s direction to 2020.

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May 29th, 2012

Perhaps Investor Sentiment Is Still Sufficiently Bearish

You know why you feel frustrated?  It’s because the market for the past year has remained almost exactly level.  Today’s close at 1332.42 is almost literally at the same level as the 1331.10 close on May 27, 2011.  And, interestingly enough, reading the post I wrote that day entitled “May 2011 = August 2010” feels like stepping into one of those carnival perpetual mirrors, where all you see looking at one is another mirror encapsulating another mirror into perpetuity:

“the current game plan (i.e., view of the market’s near term projection) goes back to January 20 in a piece called “Pivot Points and Sell-Fulfilling Prophesies”….[in which] I wrote: ‘the market is edging ever closer to a zone (1300-1350) that has seen six pivots since 1999. As a matter of fact, the last pivot was in 2008 … here we are, four months after that post and, as expected, the market stalled out just about where I thought it might (today’s close was 1325.69). We’re back to the original question: Where to from here?”

Here we are two years after that original 2010 post and the market is again struggling to convincingly cross above the 1350-1360 zone:

I had hoped the market’s course between February and May 2011 would be similar to the May-August 2010 path but. “…. wouldn’t rule out the possibility that this one would be followed by a rise to at least 1550”, or 15-20% above that day’s close.  The conclusion was based on a recent AAII Individual Investor Sentiment Survey indicating that the last time AAII members were as negative as they were (25.6) was in August 2010.

The results of last week’s AAII Individual Investor Sentiment were that 38.7% investors were still bearish.  Not as strong a contra-indicator as the 25.6% last year at this time but also not that the majority were ragingly bullish.  Consequently, I remain optimistic and hope that the market will cross 1360 and, eventually, 1390 this year and deliver the long-awaited significant tell that marks the launch of the assault on the 1567 all-time high made nearly five years ago.