i think you look better without the beard

That jaw and nose profile reminds me of another prominent BILL .. he also had an excellent handle on how to store up gold but lost his weight the hard way. Can you play the saxophone?

g034/spot/stockman/C.Note/Bill/All-

I thought this was an extremely interesting observation by one writer, discussing the future valuations of the SP500:

"We have no doubt that the S&P500 Index is immersed in a secular bear market that will continue for another 5-15 years, but, as we keep emphasizing, secular bear markets are about declining VALUATIONS; they do not necessarily involve declining prices. It is extremely likely that the price/earnings ratio of the S&P500 will drop to 10 or lower at some point over the next several years, but this fall in the P/E ratio could be driven more by a rise in earnings than a fall in prices. And if you think it is unlikely that the S&P500's earnings will rise by much over the next several years, consider that the composition of the senior stock indices will change. In particular, if commodities are in a secular bull market then 10 years from now oil and other commodity-related stocks -- the stocks of companies that are likely to experience very strong earnings growth for many years to come -- will probably make up 30%-40% of the market-cap-weighted S&P500 Index."

If I recall correctly, this is the same thing that happened during the 80s. Commodity related companies started making up a greater and greater percentage of the SP500 as the Bear wore on, eventually reaching a peak of over 30% of the composition. Then as the economy expanded they were replaced by the leaders of the day-- tech, financial, etc- eventually reaching the current composition.

Does this have any meaningful impact on portfolio composition going forward, knowing that maybe indices valuations may not decline significantly? To me it says that LT short positions may not be profitable, but there certainly could be profitable ST net short plays. But other than saying what we all know here (Commodity Bull) is there anything else to take away from this?

Bill-

This chart pattern for gold early morning is typical of a raid. Not saying it's going to happen but this is very similar to the way other sharp sell-offs have started: early morning strength, top, straight down in London into the NY open. That way those turning on their screens first time in the morning get the maximum jolt.

(When I began typing this gold was still up a dollar. That is now gone. We'll see.)

Since 6:05AM ET this morning, Gold off $5.20@599.30

C. Note-

Did you see the article in Fortune on the Top 500? LYO was in there for a HUGE increase in revenues YOY. Thought of you.

Mark:

After whining when I missed the low, LYO has provided nothing but smiles and is a tribute to Bill and his Top 100. Thanks for the heads up on the article.

C.Note-

The best attribute that Bill teaches is PATIENCE. Let the stock come to you. I am reminded of a trap door spider in this regard. It feels the vibration of another insect nearby and just sits there waiting. If the prey comes right over it, it pounces. If it doesn't, it waits.

Amen!!!

TLT-

Fingers at risk.

Scaling in. With this add will be at about 2/3 of maximum exposure to fixed income. Crude is supportive of bonds here. Move down in sentiment (as measured at Rydex cash flows) has lost mo, 20 dma downtick... if it can now rollover decisively I will add the last 1/3 to allocation.

Not a recommendation to anyone. I am required to be long and the TLT becomes a hedge. Long equity exposure is extended and popular; bonds are oversold and at negative extreme in sentiment.

long TLT

stockman-

Did you read Hussman's latest? Says that it looked tempting to go longer but that it would likely prove only a ST benefit. Still believes environment at risk for higher yields. Therefore he didn't change maturity profile in HSTRX, which is around 2 years presently.

Long: HSTRX

MarkM

Thanks for the reminder, I like Hussman.

As I recall he has been in ST treasuries for a while, right? I mean YEARS.

If I can pick up 1-200 bps above risk free, I'll seek that and earn management expenses. Look at a weekly chart of the IEF... how many times have you been able to buy at $81 and then sell at $84?

With Rydex B:B ratio 20 dma now decisively turned I will add further exposure today. While I could still extend maturity these purchaese will take me to maximum exposure in bonds.

stockman-

Hussman has actively managed the duration of his portfolio since inception. Present duration is about two years. The returns from HSTRX vis a vis Lehman Bond Aggregate are favorable so it gives me what I need (bond exposure) without having to think about it. Not intended as advice for anyone and certainly not anyone knowledgeable enough to actively trade bonds, which I am not. So just sent as data point, not as suggestion and certainly not a criticism.