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yelnick
Interests: what drives behavior
Recent Activity
Shock and Awe Again? It's been quite an interesting challenge to keep re-inventing models that work as precursor of market moves. It is a reflex of ours to quickly dismiss models that do not satisfy our high level of expectations. If you have followed our work you know we have kept up with our batting average. By now most talking heads that had been screaming about a market crash have effectively made you lose sight of a great bull run. What ever the market projection you can find on the web will relate to a crash of a large magnitude ahead. We are not surprised to read one bearish view after another. It is a reflection of the current mood.... Continue reading
Posted Mar 4, 2014 at Planet Yelnick
Predictions are hard. Especially about the future. - Yogi Berra 1. Stocks rise to new highs, but peak in January or early February, and have the biggest drop since 2011. 2. Tech IPOs soar, and despite the correction, we have the best IPO market since 1999, but it won't be 1999 quite yet next year. 3. Money begins to flow into VC again, as the depressed ten-year VC returns since the last bubble begin to give way to dramatic returns in this new tech boom 4. Gold falls below $1000 before reversing. This may coincide with the Q1 stock peak. 5. US ten-year Treasury yield goes over 4% before reversing. This may coincide with the Q1 stock peak. The correction... Continue reading
Posted Jan 2, 2014 at Planet Yelnick
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Looking back at Predictions made for 2013, Glenn Neely did very well for traders, and the infamous Martin Armstrong did well for big picture thinkers. My favorite pundit was Yves Lamoureux, who had a number of bold calls, on Gold topping and China bottoming (at least momentarily). I didn't post a list of predictions, but did show how post-election years normally turn out - weak. 2013 however did very well for stocks. In contrast, 2012 was very true to normal patterns. Several posts of mine hit the nail on the head: that the cleantech bubble had burst, and that AAPL had peaked. I will take a stab at 10 predictions for 2014 in my next post. Looking back farther, we... Continue reading
Posted Dec 30, 2013 at Planet Yelnick
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I like to run comparison charts, that this is 1987, or 2007, or 1937, etc., that often get passed around on the Internet. Some have plausibility due to similar historical and economic conditions - 1937 for example matches 2015 if we analogize the 1915-1919 auto bubble to the tech bubble of 1994-99, and then the credit bubble of 1925-29 to the recent housing bubble of 2004-08. In that case the crash of 1929 matches the crash of 2008. The attempt to reflate the economy in 1933-37 due to revaluing gold would be analogized to the Fed's QE from 2010-now, attempting to keep interest rates low to reflate the economy. Plausible, maybe. Most of these comparisons, however, are simply eye-candy, pattern... Continue reading
Posted Dec 13, 2013 at Planet Yelnick
Yves Lamoureux has been on a roll recently. He made a prescient China Top call in 2007 (reported here), then turned bullish early this year and says he is up 25%. In October he predicted stocks 'crashing up' (reported here) and they have. Now he has become cautious. His current view on the S&P is reposted below. But first, a few comments from him: We find that the study of the yield curve has a powerful predictive ability. Where we disagree with most is on the size of the drop. Market opinion would have this ending wave drop in a C wave fashion. Drops of over 50% would therefore be possible. Our count view this pullback as a wave 2.... Continue reading
Posted Dec 11, 2013 at Planet Yelnick
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Yves made a bold call on gold last February, well before the Fed's Taper Talk of May that spooked debt and currency markets. Yesterday I posted his updated gold chart. Let me show them side by side - you can see he called gold spot on. Continue reading
Posted Nov 25, 2013 at Planet Yelnick
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The Iranian nuclear deal may catch Oil and Gold investors in a Bear Trap. Initially it will be very negative for both - Oil and Gold should drop - as war fears had built a risk premium into these assets. When Oil gets and stays below $90 it should spook a lot of other markets by raising Liquidity issues. It is after that we may see a bear trap as bears pile on the dropping assets. This will, however, unfold slowly. Yves Lamoureux sent a message to that effect, and will follow up with more specific recommendations. His chart on Gold shows the coming drop as a fifth wave down, indicating end of trend. He also expects it to show... Continue reading
Posted Nov 24, 2013 at Planet Yelnick
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For fun I post the pattern comparisons to past crashes. Recently bears tried to compare this relentless up market to 1987 (fail) and 2007 (fail). The latest is to 1937, which at least has an historic logic to it: we are in a new Great Depression, which is following a different path but may end up even worse for cumulative loss of GDP. More to 1937, the sequester led to the Budget Control Act, which has remarkably lowered actual Federal spending for two straight years (that hasn't happened in a long time) and reduced the deficit both in nominal Dollars and as a percent of GDP. This reduction of Federal stimulus has made Keynesians nervous, since they worry that it... Continue reading
Posted Nov 20, 2013 at Planet Yelnick
Our frequent guestposter Yves Lamoureux, president of Lamoureux & Company, a market advisory firm based on behavioral economics, has a view on stocks: up! Neely sees the S&P in a final thrust up. The grinding climb of the Wall of Worry that has characterized this market since 2009 will continue until a final, panic-buying stage sets in. We may be now entering it. From Yves point of view, so what; a tumble in 2014 will simply set the stage for more appreciation downstream. Two competing lomg-term views that share a short-term prediction. Enjoy Yves perspective. Crashing up! Climbing a wall of worry at its best Vantage point: We are of course not surprised at the reaction of players who have... Continue reading
Posted Oct 24, 2013 at Planet Yelnick
Planet Yelnick got a good plug from The Wall Street Journal's MarketWatch over an analysis by our frequent guestposter Yves Lamoureux, president of Lamoureux & Company, a market advisory firm based on behavioral economics. Yves has come back with a new update on gold. He made a prior prediction (in this blog) that turned out to be prescient. Now he is back with a new update: Yves on Gold Update Part 2 We are amazed that a 2 months bounce can create so much attention on gold. We feel this is misplaced as oil is the asset that best gives out conditions of the macro environment. We suspect that few would entertain an Asian and European growth pick up at... Continue reading
Posted Sep 3, 2013 at Planet Yelnick
Planet Yelnick got a good plug from The Wall Street Journal's MarketWatch over an analysis by our frequent guestposter Yves Lamoureux, president of Lamoureux & Company, a market advisory firm based on behavioral economics. Yves has come back with a new update on gold. He made a prior prediction (in this blog) that turned out to be prescient. Now he is back with a new update: Yves on Gold Update Part 2 We are amazed that a 2 months bounce can create so much attention on gold. We feel this is misplaced as oil is the asset that best gives out conditions of the macro environment. We suspect that few would entertain an Asian and European growth pick up at... Continue reading
Posted Aug 31, 2013 at Planet Yelnick
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Albert Edwards prediction: sees the Emrging Market economies collapsing,driving down US stocks and reversing the recent rise in interest rates to a sub-1% 10-yr Treasury. In his diatribe, he references Zerohedge and its wont to show analogies to 1987, like this: I have run a number of these sorts of charts over the years, including recent 2007 comparison, and none has come to fruition. So treat this as stock market eye candy. Edwards does not say a crash is imminent either; he thinks hte next shoe to drop will be China in Q4, and will come with a rather shocking devaluation of the RMB. That could spook markets worldwide. Continue reading
Posted Aug 29, 2013 at Planet Yelnick
What to do after the interest rate spike? This is a very important Guestpost from Yves Lamoureux: From Bond Apathy To Panic A harbinger of the next 5 years Stock Bull We have been glad this year to be on the side of the bull camp. Our job has been an easy one as we pursued the long side of stocks. We remain bullish despite raising big amounts of cash many weeks ago. We think we can redeploy money shortly once we feel the corrective phase is over. It has been a much different story on the income side. One that shows only the start of something much bigger. We did forecast long bonds to drop to a yield of... Continue reading
Posted Aug 27, 2013 at Planet Yelnick
This should be easy - Canada has the same numbering system as the US (and the same plugs!), had a Bell System, and is so close. But nooooo. Don't be fooled. AT&T does not directly work here, and you get... Continue reading
Posted Aug 22, 2013 at Happy Travails
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I have seen an increasing number of chart comparisons to 2007, right before we entered the Global Financial Crisis and suffered the 2008 crash. PragCap has a good discussion of this, here, with this chart: Jeff Saut gets credit for first popularizing this meme. John Housmann has also picked up the thread. One upcoming event that may spook the market is the GDP report. Predictions have been sinking, now below 1%, essentially stall speed. The first shot across the bow may be around August 7. Continue reading
Posted Jul 22, 2013 at Planet Yelnick
Guestpost from Yves Lamoureux: We could not have been more ultra bullish on stocks since the start of the year. We are now concerned, as we had stated, of a fast unwind of leveraged positions. We have correctly called the bond and gold crash. That relationship is clearly evident. Leverage worked perfectly when rates "WERE" low! They are not anymore. A quick survey would have yield getting to be twice of what they were at the lows. We had clearly defined our views of front running the bond market the other way around this time and it has avoided us this really big break. What concerns investors avoiding stocks should have is simple. They are attempting to flee a stock... Continue reading
Posted Jul 10, 2013 at Planet Yelnick
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As panic sets in, Yves Lamoureux is preparing his next bold call. As reported here, he called the peak in gold before other pundits saw it, and made other bold calls that have him now referred to as the new bond and equities guru. Here is a copy of his Feb 8 newsletter on point: Download Lamoureux_Finally Why Gold Will Be Rigged Higher. His most recent views on economic conditions are summarized in this post from several weeks ago. We now have hit the inflection point he predicted. The reversal in bond rates is truly stunning: The next phase of global volatilty is a surge of liquidity from a final central bank effort to prevent the reversal of rates and... Continue reading
Posted Jun 24, 2013 at Planet Yelnick
This one was annoying, and I don't yet know if I will run into a registration problem. This is a different registration than France, which registers the SIM. In Turkey they register the phone. We ended up paying TL70 for... Continue reading
Posted Jun 15, 2013 at Happy Travails
Athens airport is new and pretty nice, but we didn't find a mobile carrier store. Instead we asked our driver to stop at one on the way into town. We chose Vodafone. He did, and we bought 3 SIMs. The... Continue reading
Posted Jun 15, 2013 at Happy Travails
This one is hard. France requires the SIM to be registered. You can buy one and do this in advance, by mail or fax; or do it there. Recommendation: do it at an Orange store. Don't buy a SIM, even... Continue reading
Posted Jun 15, 2013 at Happy Travails
The Lucky Country is easy: when you get out of customs with your bags, and are in the entry hall, wander over to the mobile carrier booths (I go with Optus) and buy a short term data plan. Make sure... Continue reading
Posted Jun 15, 2013 at Happy Travails
Yves has an update to his recent posts: Sitting on an Inflation Powder Keg Voices of hyperinflation have been quieted down. We have agreed with participants on the matter but not on their timing.The economy has shown more resiliency than economists expected. We have been and remain bullish. As fear dissipates, we are sitting on an inflation powder keg! Massive amounts of liquidity will move back to real assets in due time. It has been a slower process because there is a lot of fear out there. We think that we are now nearing this inflection point and it is quite exciting. Our advisory services already look to score nicely for the first half as we have been mostly long... Continue reading
Posted Jun 9, 2013 at Planet Yelnick
cobran, kind of you to say. I am in the VC biz, and it is 1997 all over again - not yet the crazy period, but definitely the third big tech boom after microprocessors/PCs (78-83) and dot-coms (94-00). in other words, busy busy. I continue to watch the macro environment - most VCs don't, other then to watch IPOs - and the scramble for yield seems destined to send capital into tech. Last year's IPOs (Facebook, LinkedIn) were so last decade so to speak - they started in the early 00s. This year's IPOs, such as Tableau, are of more recent vintage. So far they are doing well on IPO day and in the after market. A lot of tech companies with serious revenues ($100M and up) are lining up to go out; and some even have losses, shades of 1998. If they do well, the floodgates should open in 2014 even if - and maybe especially if - the macro environment sucks wind. So we get beta in tech. The VCs like me search for alpha. The combo should deliver outsized returns - the better of the new breed of funds are doing 30%+ IRRs.
Walter, the good news is that we may be about to go into another US tech boom. There really is no place in the world to get yield, and the Global Scramble For Yield will soon look at tech IPOs as a new game. I will write about that as it happens. RIght now we have the risk of Japan driving UST up, USD up, and soon US stocks down. Could be a rough summer.
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Since The Bernank spoke last week, the Japan markets have been in turmoil. Stocks have fallen over 12% in just a few days, and, most troubling, bond rates have risen sharply. See chart, courtesy Zerohedge: Is the Bank of Japan losing control over rates? The theory of QE is that the central bank can manage rates down by purchasing bonds, but the bond vigilantes in Japan are pushing back. In the US the fear is that the Fed will be unable to taper off QE. The Bernank's remarks last week were of a taper, and yet in the US the 10 year has spiked above 2%. There is a concern that if rates go above 2.2-2.25%, the biond portfolios will... Continue reading
Posted May 27, 2013 at Planet Yelnick