Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
For those fascinated by financial history, like me, there is an excellent blog summarizing the day in news from 1930 (http://newsfrom1930.blogspot.com/). One of the notable aspects of news from the fall of 1930 is the amount of cautious optimism about how things are turning up. It sounds quite similar to this fall:
F.
Purnell, Youngstown
Sheet & Tube Pres.: “There are plenty of evidences that the steel industry
is looking up. We have passed through many months of depression but that is all
behind us. … Industries consuming steel are increasing activities.” (10/16/30)
Many of the Q3 earnings reports so far have been “fair reading,” especially in
light of the pessimism going into earnings season (10/22/30)
One fact I found interesting is the parallel in the decline in rail car loadings, 2009 versus 1930, which I have put in a table below:
Rail Car Loadings: First Week in October
|
|
Current Year |
Year Earlier |
Change |
|
1930 |
954,874 |
1,179,540 |
(19.0%) |
|
2009 |
273,429 |
330,228 |
(17.2%) |
For those who might think this is irrelevant, given the diminished role of railroads in our modern society, take a look at one of the better measures of "real" economic activity — Port of Long Beach container statistics. The story is quite similar:
Latest Month
Container Trade in TEUs*
|
|
September |
Fiscal Year to |
||||
|
|
2009*** |
2008 |
%Change |
2009*** |
2008 |
%Change |
|
Loaded Inbound |
224,924 |
279,137 |
-19.4% |
2,612,227 |
3,337,717 |
-21.7% |
|
Loaded Outbound |
109,337 |
129,630 |
-15.7% |
1,331,872 |
1,782,298 |
-25.3% |
|
Empties |
106,103 |
146,070 |
-27.4% |
1,338,286 |
1,616,741 |
-17.2% |
|
TOTAL (T.E.U.) |
440,364 |
554,837 |
-20.6% |
5,282,385 |
6,736,756 |
-21.6 |
Is this information "tradeable.' Not really, unless you are looking into companies like UPS and UNP, both in a tailspin due to earnings I believe. But does this information add some big picture conviction to my conclusion that the current rally has gone too far, too fast? No question.
As a good contrarian, I like to keep magazines which capture the zeitgeist of their day. Here are a couple from a decade ago, at the peak of the Internet bubble:
One of the articles in Money magazine, whose cover is above on the right, is The Sensible Internet Portfolio. It lists six stocks that aren't so nutty as their peers. They are:
Of the six above, four of them are delisted. I don't want to dig through bankruptcy proceedings or merger deals, but I think we can all safely agree that the four that have vanished had a substantial decline in value. As for the two you can still chart – ARBA and VRSN – I have put graphs here and here (no need to gobbling up your screen space with these things).
Am I suggesting the market is like early 2000 right now? No; the dot-gov bubble's lunacies are confined only to certain places. We're nowhere near the insanity of those days, although I do thing the systemic troubles are far worse.
My point is that it helps to keep perspective. One week from now we're going to know a whole lot more about the direction of the market than we do now. Because, frustrating as it has been, the push higher makes total sense from a charting perspective. However, if we continue to blow higher, right past the 1120 level, there are going to be a lot of confounded, frustrated, and much-poorer bears. If the balance of the week brings market action that slices us right through those lofty levels, we've all got some serious rethinking to do.
