Re; ".... Looks like the bull run is going to continue. Good luck to all, heading to another island in 5 hours where there is ZERO electricity :( http://www.ritholtz.com/blog/2009/05/sp-500-earnings-decline-90/ Required reading for BEARS."
Thanks for sharing the reference - compelling reading for everyone IMHO!
IMO if it can happen to bulls it can happen to bears! The Market is driven by sentiment [esp. fear & greed] & data lags the impact sentiment has had. IMO by mid-2007 the big players were struggling to make easy money while increasing debt & exec. remuneration were beginning to cripple companies.
Amidst a global sea of positive economic data suddenly it was revealed we had dodgy asset valuations compliments of all of those so-called reputable authorities which perform valuations [I think its Rule 157 in the US but IMO a classic example can be seen by studying OZL's asset valuations]. By late 2007 we had a world full of toxic assets supported by mountains of bad debt!
Said Authorative Bear 1 to the global community; "I think there's a problem, it's too risky for me so I'm pulling out all of my capital [IMO Bear 1 persuaded mates to come along & actually reversed position - maybe even joined by investment banks fuelled by taxpayer bailouts?].
So what about post March 6, 2009 ... despite their best efforts & mountains of negative data bears are struggling to smash enough companies, to create more fear & to force markets even lower. The cold hand of big bad government which has touched the warm glowing heart of the so-called investment community just will not go away. IMO swine flu may even have been the last great hope, but data shows The Market just ignored it!
IMO the promise of forever lowering prices is giving way to fear that government capital is replacing private capital, tax havens are being held to account, exec remunbsreations are being queried & the activities of hedge funds made more transparent [shock, horror, how unfair that is for them to be exposed to the same rules as banks]. Consequently so-called private investors may have to pay more to first retrieve investments in tax havens, as well as their shorts and then re-invest it somewhere more transparent and more legitimate to the public for the foreseeable future.
Inventories of those toxic assets have already dwindled & someone will suddenly magically ascribe massive value to them because they weren't really worthless after all & the previous valuers went too far! IMO paper profits will return as people scramble to buy before prices soar & inventories vaporise because the mechanisms for creating supply havve been wound back.
IMO we now we may therefore be seeing sentiment flip, as in late 2007! In that scenario the bulls are back in town; wounded, cranky & very hungry [LOL]!
But then, what would I know; so please DYOR & thanks again for sharing it with us. Hope you enjoy the island experience!
(20min delay)