Behold: A Whole Bunch Of “Bull”Sh*t

Now, look. The thing about predicting the future is that you can’t ever really be “wrong” if you don’t put an expiration date on your prediction.

The future is inherently indefinite, so as long as you don’t say “we’re going to see a catastrophic selloff/furious rally by [X] date,” no one can ever say your prediction didn’t come true.

Of course that’s cheating. We’ll all be dead eventually (except for me), and if your prediction doesn’t come true by the time everyone who heard it dies, then for all intents and purposes, you were indeed “wrong.”

But being “early” isn’t the same thing as being “wrong.” In fact, if you aren’t early, then you didn’t predict anything. You can’t “predict” the past.

So I hear a lot of “you were wrong” chatter not just about myself, but about anyone who had a bearish call on anything over the past year. The amusing thing about that is that we (me and anyone who was bearish) were in fact “right” in January of 2016 just like we were “right” in August of 2015. It’s almost like people who are bullish think the bears are “wrong” if stocks bounce after a selloff. By extension, in order for the bears to be “right,” stocks would have to go to zero and stay there forever.

With that in mind, I wanted to show you some charts that depict just how sure the bulls are about their equity long positions. Of course if you frequent these pages you didn’t need a reminder because you know that last month was the third calmest January in history as measured by the average level on the VIX. But even if you did know that, it’s still amusing to review some fresh visuals because they demonstrate the extent to which a whole lot of people are going to be eating a whole lot of crow if this turns out bad. Enjoy.

Via Goldman





(Charts: Goldman)




One thought on “Behold: A Whole Bunch Of “Bull”Sh*t

  1. Funny, I was just thinking about this subject today. How you, and other “bears” are being heckled for your pessimistic position but that sometime you will be proven right. But when?

    I agree with you. I read your articles on Seeking Alpha and recently found this site. I admit I don’t understand your complex explanations sometimes, but I get your points – things are right. The fundamentals are completely fu*&ked up. Now ordinarily, I am a positive and optimistic person. I believe things will work out for the best in life if one thinks positively, applies themselves, works hard, etc etc. But that’s out the window with today’s economic and financial fixed game. I received an executive MBA last year. In my Econ class, my professor discussed the massive amounts of debt across the world, and in Finance, we discussed the extreme financial engineering that companies have and continue to engage in with non-GAAP adjusted earnings, stock buybacks fueled by debt accompanied by paltry earnings growth (if not negative). You know, textbook fundamental shit that makes sense, the basics. So, I needed no more convincing – it’s all going to go to hell in a hand basket. But when? So I went to cash. And stayed in cash. Still in cash, but I have less now after messing with short volatility ETF”s (I know, I know, what a dumb ass, but don’t rub it in. I had to learn for myself by losing my ass).

    As you have emphasized using numerous examples, the “black” and “grey” swans don’t seem to scare the market anymore. Volatility is non-existent. But recently, I figured out why stocks continue to go higher and volatility is pushed down without regard to fundamentals. There is an unprecedented amount of money pursuing a diminishing number of stocks. There are half as many publicly listed companies today than 20 years ago. And the ETF’s magnify the shrinkage of available stocks by funneling more money into the limited number available. Couple that with the central bankers flooding the world with unprecedented amounts of money, all this capital seeking a positive return. What a powerful force this is, and I wonder more and more, might overwhelm the fundamentals longer and longer. The massive amount of money chasing returns could make it more difficult for a sharp sell-off to occur. I still agree with you and appreciate you emphasizing the complete whole bunch of bullshit going on, and on, and on. But does it really matter with the sheer structural force of trillions of dollars of money sloshing around ready to buy on any little dip?

    Thanks for allowing the rant. Keep up the writing.

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