Re: Birchtree's account talk
I recently received some information from Robo regarding a Zeal Intelligence article entitled "Capitalism without failure is like religion without hell." I would like to post a few comments from a very long article that appeal to me.
"Bad news emerging from the Q4 panic quarter was ubiquitous, yet selling didn't spiral out of control as it did in the panic. This radically increases the odds the deep lows of November indeed marked the universal selling exhaustion necessary to burn out the panic. January's low was higher.
The dollar swooned again the moment stock selling stopped, which suggests it is not going to fare well as the SPX rallies out of its panic lows. But since the Fed has doubled the US monetary base in a matter of months, the dollar is highly likely to continue to fall which is all the better for gold.
It is amazing how morose the thundering herd is! Everyone is looking for more deterioration instead of simply acknowledging the fact that panics are rare and atypical so anything we see within them is not a harbinger for non-panic conditions. Virtually everyone expects things to get a lot worse before they get better. This kind of sentiment is what you see at the end of bears. Nearly everyone is bearish today, in degrees ranging from expecting mild declines to the next Great Depression. Today's true contrarians (Birchtree) aren't the most pessimistic among bears, but the exceedingly rare bulls. So as a contrarian, I have to be brave. I have to be bullish on a future that nearly everyone else thinks is a mess. Yes, the panic was a nightmare, Q4 was terrible, and the economy and earnings data has yet to show a strong recovery. Still, sentiment is way to negative so we have to be bullish.
With the one exception of the Great Depression, history suggests we could see gains of 25% to 50% in the US stock markets in calendar 2009. This probably sounds crazy, but only because it is such a hardcore contrarian notion for the bearish sentiment wasteland today. Yet the markets are a self-balancing mechanism. When greed or fear gets too out of control, the opposing extremes next to rebalance everything out. A big up 2009 would balance out 2008." Birchtree is holding out for a 2009 SPX level to reach 1700.
http://www.ZealLLC.com
After listening to their conference call, I realize it will stink for years, or at least until they pay off the Feds and bring the div back. There's talk they may need more fed money, hopefully this won't happen and they will make do. But I do believe it will make a comeback within 3-7 years.
