Capitalogix Commentary 03/06/09

Cartoon Why This Depression is Worse than 1930

You've probably heard the joke about the difference between a recession and a depression.  It's a recession when your neighbor loses their job; and it's a depression when you lose yours. 

Here is a cartoon that pokes fun at something similar.

The 1929 crash got off to a much faster start, but we have now more or less caught up.  That isn't as funny because of how true it is becoming.

Bespoke had an interesting tidbit, only 5% of stocks in the S&P 500 are still trading above their 50-day moving averages.  Three sectors — financials, industrials, and utilities — have zero stocks trading above their 50-days.  Technology has the highest percentage of stocks above their 50-days at just 12%.

Because of the unrelenting selling, many believe that stocks are ripe for a bounce. Supporting that are several reasonably reliable indicators.  The first is that Smart Money
is continuing to get more bullish (while retail investors continue to get
more bearish).  We are getting close to levels that often signify
rallies.  Similarly the American Association of Individual Investors (AAII) reported the highest level of bearishness (over 70%) since they started measuring in 1987. This is often construed as a contrarian indicator, since the highest levels of bearishness often occur at market bottoms.  So at least now you can feel good that people feel bad.

Sometimes the truth in humor tells the story better than other methods.  Here is a clip from Jon Stewart's Daily Show.  In it, he does what he does to CNBC.  It's pretty funny.

Here are a Few of the Business Posts Moving the Markets that I Found Interesting This Week

  • GE Shares Fall to 18-Year Lows. (WSJ)
  • Unemployment Rate surges to 8.1% – Worst since 1983. (Guardian)
  • Gates foundation sells-off $100 million of Buffett shares. (CNet)
  • Sentiment Overview for the Week. (Trader's Narrative)

And, Here are a Few More Lighter Ideas and Fun Links:

  • How to Be an Angel Investor. (Paul Graham)
  • Brief book summary of Jim Collins' "Good to Great". Interesting. (Brevity Brief)
  • Is web-design becoming more blog-like because of Search? (Forbes)
  • Silly service translates and dumbs-down what you say. (Untelligencer)
One Comment
  1. The Stewart clip is funny but clearly there’s an important point underlying it, as well. Jim Cramer, Rick Santinelli, and their colleagues certainly have the right to continue to bloviate. There’s no compelling reason, however for anyone to take them seriously.

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