“Gloomy investing books are everywhere. It must be time to buy” . . . says Tony Boeckh

A recent article in Canada’s Globe and Mail newspaper had the above headline.  Here are a few quotes from the article that I found most pertinent.  Jeb Terry, Sr. Dec. 7, 2012.

“the majority of stock seers are currently bearish, and the consensus view is typically incorrect because it’s likely to be already reflected in prices and therefore not much use for making money. To make decent profits, investors have to do something difficult: break from what the herd is thinking, and do the opposite.”

Mr. Boeckh, who hails from Montreal and formerly was associated with BCA Research, the well-regarded market forecasting firm, analyzed current business book offerings and found titles with doomster leanings outnumbered those with an optimistic tilt by a staggering 61 to five.”

Mr. Boeckh’s conclusion: to get so many bearish titles dominating book sales, a trend has to be long established and people must be “traumatized and disillusioned with economic and financial prospects.” It sounds pretty convincing to us at Inside the Market that investors should look at the book titles and be doing the opposite.”

Aberdeen Investment Management – a guide service for micro-cap technology investment

 

 

Bet you wouldn’t have guessed – 3Q Nominal GDP growth was best in 5 years, the fiscal deficit is declining the fastest since WWII and household financial assets are at a record high.

In light of all the hoohaa in the press about the “fiscal cliff” I felt some data points would help calm your nerves.  The American economy is in better shape than the politicians would have you believe and this is a key reason why I do not fear “going over the cliff”.  I present three charts for your enlightenment.  Jeb Terry, Sr. Dec. 6, 2012.

First – nominal GDP – which is what we all experience and is what is expressed by the earnings of business – was the best in 5 years in 3Q. A simple glance at the charts reveals a sturdy performance by an economy that doesn’t have the benefit of a bubbly housing market, a full on war on terrorism or rising consumer and business indebtedness.  The economy can continue to grow, if not accelerate, as housing continues to gain traction, autos gain traction and technology continues to grow.

Who knew? . . . the government deficit has fallen faster than anytime since WWII over the last 3 years.  An untold story is that the Obama stimulus plans are unwinding.  Non-defense discretionary spending as a percentage of GDP is already shrinking by as much as 30%.  Government employment has actually been DECLINING for first time in most of our lives.  It is constructive that the public debate is so focused on more restriction in government spending and deficit reduction.

The recovering economy is also allowing household balance sheets not only recover but grow.  Household net worth is set to continue to expand as housing values improve. You wouldn’t know it from the press but not only are financial assets at a new high in dollar terms but they are also at a new high as a percentage of household net worth.  We have the most liquid financial assets ever and household net worth that is approximately 50% higher than at the peak of the tech stock bubble in 1999.

CHEERS!

Aberdeen Investment Management – a guide service for micro-cap technology investment