This Time It'll Be Different

Einstein said that the definition of insanity is doing the same thing and expecting a different outcome.

Contrarian

Submitted by bsfootprint on Tue, 03/20/2012 - 09:50

Here's a perfect example of why I don't yet see a secular gold bubble:

Last April, I shorted SLV in the face of the great precious metal mania. Everyone wanted silver, Cramer was telling me to buy silver, my precious metals refining neighbors were telling me to buy silver, silver was absolutely going to blast through $50/oz., the banner ads on my browser were telling me to buy silver, Zerohedge was telling me to buy silver, and everyone who owned silver was borderline insufferable with joy. Silver was the world’s greatest hedge to every global problem. So I sold the hell out of silver. One week later SLV lost 25%. link

When my neighbors, relatives, and co-workers are telling me I've got to buy gold, I'll know we're in a secular gold bubble.

Apple (AAPL): Is this another secular bubble?

Now, 11 months later, the world has found another AAPL of its eye. Pun 100% intended. Their iPhone’s cure cancer. Their iPad’s help the blind see (retinal display…seriously?). Their iPod’s have cultured the ignorant. Everyone wants AAPL.

AAPL is easily a $1,000 stock, Cramer is telling me to buy AAPL, every analyst has a buy recommendation on the stock, and according to all valuation metrics (except common sense) it is still cheap. Buy AAPL!

(Source)

So, today, I sold the hell out of AAPL. History repeats and I expect it to repeat two days from now.

Will AAPL tank? Who the heck knows. Maybe this time it'll be different. All I know is, 9 out of 10 sources seem to be yelling "buy AAPL". My inclination is to assume that people who are just now buying AAPL are contributing to the Greed or Delusion stage of a secular mania.

AAPL: Reversion to the mean

If and when the bubble bursts, and AAPL over-corrects, will it drop to $150 before returning to the historical mean? When Apple's stock reverts to the historical mean, will it trade at $300? $250? What is the historical mean price for AAPL?

Disclosure: At the time of writing, the author has no position in AAPL and has no plans to take one in the foreseeable future.

Sources:

Why I Am Short Silver...I Mean AAPL (slopeofhope.com)

Stages in a Bubble (people.hofstra.edu)

Filed under

Login to post comments
Permalink

Obamacare? No, Obey Me Care!

Submitted by bsfootprint on Mon, 03/12/2012 - 15:39

ObamaCare? No, ObeyMeCare! Bumper sticker

When Uncle Sugar's footing the bill for health care, will you be shocked when you're told what to eat, how to exercise, and what meds to take?

I thought this might help illustrate the end game of Obamacare. The emphasis is on the word Obey, fading out to the word care.

Remember, folks, he who pays the piper calls the tune. Not too hard to grok, is it?

Buy one for the team!

Here's a super-cool pre-made bumper sticker you can slap on your neighbor's Prius*. Support bsfootprint, and show your stuff! (Available through by zazzle.com.)

Obamacare? No, Obey Me Care! by bsfootprint
Browse other bumper stickers on zazzle.com

Print your own!

And, just to show you what a nice guy I am, here's a free for non-commercial use, downloadable, high-rez version. Print your own, give a few to your soon-to-be pwned-by-Obamacare friends! Use them while you still can!

* With their blessing, of course.

Filed under