Oppenheimer Holdings Inc. Message Board

The bears and even some bulls say that all this optimism of the markets is an illusion, it is a Fed induced rally and not a fundamental expansion….As we all know this rally is not due to current extraordinary revenue growth, superb margin growth or low price to earnings multiples but to me, it all boils down to the realization by investors that American companies are dominating the world and can easily expand market share if only they put their cash to work more aggressively. We need to see an increasing acceleration in money supply that will trickle down to the real economy.

With that said, I still like the hesitation by these institutions, it is proof that nowadays firms are more rational; many are still reeling financially from the financial crisis a few years back.

The fact that no mid/large cap companies are trading like a 50 cent-on-the-dollar investment, despite the stimulus of quantitative easing, is a very strong sign. Even as earnings and margins might still be on the normal side, the current trends capture the potential of a rising and explosive US investment-based mindset.
Based on the history of global investors to US based companies, we can be fairly certain that a strong rally will come soon enough. I don’t know if the spike in performance will come by month-end or year-end but I believe that we have in no way reached the top. A potential strengthening in the US will be the driving force and lead to a rise of all boats…. global markets will surely follow…

the most likely trend to follow is the strength of the economy….which will anchor a further rise in the stock market….

I guess this is the million dollar question nowadays…..Here is why?

Some like to use the rumors of whether “the Fed will or will not taper” to prove that markets move according to this idea. I too believe that this “whisper” did in fact play its role in price action. But only initially, to me, markets are really good at quickly switching to what should be the most currently relevant/appropriate focus and invest accordingly...

Here is a story that I think might better illustrate my point:

A minister told his congregation, "Next week I plan to preach about the sin of lying. To help you understand my sermon, I want you all to read Mark 17."

The following Sunday, as he prepared to deliver his sermon, the minister asked for a show of hands. He wanted to know how many had read Mark 17. The majority of the hands went up. The minister smiled and said, "Mark has only 16 chapters. I will now proceed with my sermon on the sin of lying."

My point here is not to question the majority of the audience raising their hands when not having “read” the chapter of the book….my point here is that the audience might have been tricked the first time, by the minister’s witty attempt to push his point across, but it’s necessarily doubtful that they will be tricked a second time.

And that’s exactly what occurred last Friday with the strong employment number. The markets did not sell off when asked if they had “read” the chapter. In fact, it had the exact opposite reaction: no one raised their hands! The “minister” thus had a very hard time proceeding with his “sermon” and helping them better understanding it!

Moreover, there are also those who claim that there is a rotation from bonds to equities that’s why markets soared on Friday….they are simply confusing the “affect” vs. the “effect”….as I have been recently writing, to me, stock buying, selling or rotating is affected by the strongest player effect…the markets no longer care if the boy cried “taper”!

pretty powerful move in equity markets, me thinks. but will this out-performance continue?

if you have been reading my past (sometimes cryptic and rich in mystical language) posts, you probably know where my focus lies now. i am no longer fed-focused since i don’t think the fed’s actions have any bearing in the velocity of money. i actually think, my new focus in determining the next directional move in markets is fairly reasoned and simplistic.

while the media has again failed to adapt and capture the reasons for the changing economic circumstances. others, like me, are trying to gauge possible or probable economic outcomes by following the foxy or hedgehog-like actions of these institutions.

to me, they are the strongest players today, not the fed. and again, my belief is that this will become more evident gradually, not instantly…

as always: just my personal opinion

There is a very interesting TV commercial, I think it is that of BMW, where the fighter jet flies over the accelerating car and instead of fueling the car, it "refuels" the driver's coffee cup!

This concept is flawed. I don't care how fuel efficient the car is, acceleration is directly proportional to the fuel used. Eventually the car will run out of fuel or then have to decelerate in order to reach the predetermined distance.

My point is, we are currently refueling the "coffee cup" and the driver seems to be "wide awake" but unless we refuel the vehicle again, the driver will have to resort to other means of transportation.....

The Fed has already refueled the rate of economic development through upward asset prices but in order to sustain it and reach its destination, it needs to "refuel" the value of money!

To me, it is the only way to achieve a S-Shaped Curve and avoid the second derivative straight-line up, down, up, down segments.....

Exactly one year ago I found myself puzzled in my inability to decipher order in stock market trends….and we all shortly thereafter discovered what was moving the indexes so violently….skewing the returns…

Dazed and confused: Today, I find myself wondering again why the equity indexes are moving higher in the past few trading days…

To me, the US dollar should have moved much higher than its current levels and markets would have flattened, if not sold off, in response to this…

Is it perhaps that an entity is buying up so much of this x-currency that y-currencies are not allowed to spike?
And if x currencies are moving higher why doesn't the z-currency move lower?