March has been a pretty incredible month so far. As of yesterday's close, the Dow and the S&P 500 are both up more than 20% since the March 9 low. The TSX has rallied 19%. A 5% pull back here would be healthy and welcome as an opportunity to quell over-exuberance. Whether this will happen of course remains to be seen. We should remember that a healthy market climbs a wall of worry in fits and starts. Straight up or straight down are not sustainable trends either way.   more »

The roller coaster footage is quite effective.

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Ms Park was a guest on BNN this morning with Micheal Kane at 835am.
You can view the clip on the BNN web site here.    more »

This interview on the Comedy Network was some of the most honest TV I have seen in a good while. Jon Stewart is that valuable combination of wise and witty and he makes his points very well. Watch the full segment here (Hat tip and thanks to Bernard)

I have been waiting for 9 years for Jim Cramer to finally be dismissed as one of the modern poster boys for all that is wrong with the financial world. I wrote about him in Juggling Dynamite. Incredibly his show seems to still have a big following...   more »

My apologies for being missing in action the past 10 days. I am presently touring the Mediterranean and Middle East and although I have on line access, the satellite has been mysteriously blocking my access to the blog. This should change by Friday when I will return to mainland Europe.

For those who have been thinking the US is in bad shape these days, one really needs to visit abroad for useful perspective. The past few days I have been in Cyprus and Egypt. Lets just say green energy and progressive waste management are far from their agenda at this point. Widely evident is the incredible chasm between the ultra wealthy and the average population who seem almost hopelessly poor. Government corruption has been a key theme and oil has been the blood money of choice. Piles of garbage line the streets and the rivers. The child cancer rate is high and rising. Given the evident pollution one cannot be surprised.   more »

More interesting historical perspective on the magnitude of this cycle's decline in equity markets versus other great bears in the past 100 years. Watch this video clip from John Authers of the Financial Times.

Also this article and chart on the rarity of 12-year lows is interesting.

None of this can be taken as predictive of what comes next, but the longer and deeper this decline the greater the probability that we are nearing its end. Does this mean that those who have lost in the bear will be back to even again soon? No. The math of loss is not so kind. Those that lost 60% will now need gains of 150% to recoup their capital. This will take years not weeks. That is why the primary focus of a valuable investment strategy has to be avoiding down market returns. Up markets are the easy part.    more »

It is anyone's guess where we go from here, and there are plenty of guessers hard at it. The majority of guesses I see lately are increasingly pessimistic. And that may be right. I asked an audience at a conference Sunday for a show of hands as to who felt optimistic about the stock market over the next 12 months. 5 out of about 300 raised their hands. Two years ago, this question saw most in the audience with their hands up. In the past I have found that this question tends to be a good contrarion indicator at turning points.

Logic breaks down for me when commentators start pointing to the stock market declines in the past 6 weeks as a good predictor of what the future holds. The thing is 18 months ago markets were at all time highs around the world. Was that the market's best prediction of present times? Then that argument falls flat. Markets did a horrible job of seeing the present mess coming. The fact I have known for many years is that markets aren't omniscient or rational; they represent herd think and a collective vote born of human behaviour and emotional reasoning. The behavioral science concept of the ‘recency effect’ states that humans most typically see the same ahead as what we have seen in our recent past. So in a bull market, we see more bull, in a bear market we see more of the bear. This is the human nature that we have to fight in order to keep thinking and measuring...   more »

Good article this morning on the Big Picture about conflicts of interest in the money business. This is why people of moral fibre generally can't stay working at the broker/dealers/mut fund sellers of the world. Products sales are the ugly elephant in the room. They try to cover it up with smooth words, feel-good pictures and fancy charts, but the foundation is a fraud. It’s all about growing firm revenue. Nothing really to do with best interests of customers, or valuable risk management. I worked on the sell side for six years; I know its smell well.

As for the customers who take their advice from the drug pushers and the "advisors" who sell themselves to the machine, as my Irish father would say, "You choose to lie with dogs you get fleas." Once we learn that lesson though we can make wiser choices. It takes more thought, work, and personal responsibility, but it is incredibly liberating to break free of the mythology. See Big Firm Conflict of Interest and the comments that follow it.   more »