We were trying to decide who to make fun of today–thinking especially of Friedman and Laffer and other unenlightened economists. Especially after reading Shiller in the Sunday Times — who rightly warns of the corrosive effect of long term unemployment and argues for government programs to address the problem. Government? Oh yes that was government that Grover Norcross just drowned in the bathtub.
But then we discovered the mother lode of comedy at http://www.marketwatch.com/story/hate-financials-hedge-funds-love-em-2011-11-25. It turns out that hedge funds are doing some very comical things — if you call buying and owning stocks in downtrends amusing. Here are some of their favorites: GOOG AAPL MSFT C BAC WF GM AMZN YHOO EBAY
Would you hold or buy this stock?
or this one —
A number of their favorites look like this.
And like this. Now you are snickering up your sleeve and saying, what are they doing buying stocks with charts like this?
Maybe they are looking 5 years downstream. Maybe they are buying because there is blood in the street. Could it be they don’t know what they are doing?
A year or so ago we made the remark that with 9000 hedge funds the funds had now become the public, and that there were not 9000 competent managers. Are these charts proof of that? In looking at the group of stocks the hedge funds we saw hardly a one we would want — not to denigrate AAPL and GOOG. But we would not be buying them right now in this market environment, and especially when there is nothing we can identify as a signal.
Speaking of which —
The major indices are still dropping from the triangle and should not be bought until a bottom of the downwave is obvious.