Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Support MFO
Donate through PayPal
Yikes. This one comes via Danielle Park in Toronto. (Link.)
Hi Catch. My guess is she's an aspiring Dickens or Fitzgerald. Generally, I like my coffee black, not spiked up too much. These hyperbolic sound-bites are apparently from representative monetary figures. However, that's not to say Ms. Park's finished product is representative of their overall positions.
"money slump flashes warnings" "the Fed (has) a grim choice" "below stall speed" "(failure to reach) escape velocity" "...cliff-edge drop" "Japan style trap" "too awful to think about..." "a Catch22 decision (for the Fed)"
None of this is to dispute her thesis of fiscal and financial catastrophe. A case can be made for or against. But, IMHO, Ms. Park's literary style is better suited for fiction than for serious financial analysis. --
As you know, I’ve been recently campaigning on MFO to recognize that experts really often fail to forecast accurately.
One part of my skepticism is based on defining what factors integrate to establish the credentials for an “expert rating”. A second part addresses the processes that the expert deploys to reach his/her forecasts. A third part deals with the expert’s accumulated record. The proof is ultimately in the pudding.
I am doubtful that Danielle Park satisfies any of these components.
Park was trained and worked as a lawyer, not a financial expert, until just before 2000. Her most notable accomplishment was her “Juggling Dynamite” book which was published in 2007. She became a expert in an amazingly short period.
Park is a chartist. She trusts technical analyses, but also talks meta-macroeconomic influences. I am not familiar with any references that reveal how her charts and meta-analyses are integrated together to form an opinion of market direction. The details of her decision process are a closed book.
Overall, Park has been mostly a Bear market advisor. As early as about 2000 ( she was nearly a rookie at that juncture in her investment career), she projected a secular Bear market for the next 20 years. Most recently, she remains bearish on the investment climate, and has positioned her clients in non-equity holdings. Her frequent defensive positioning must have burdened her customers with opportunity cost penalties. Her scorecard remains a mystery, but I doubt it is very impressive.
At some point, Danielle Park’s negative market perspective will be correct, and the media will proclaim her a soothsayer of the first order. I will not. I do not rate her as an expert; she is merely a talented financial saleswoman.
So, I’ve made a full circle. Experts are often overrated, and do no better at forecasting than you or I could do. There are exceptions. The trick is to discover these rare experts in time to exploit their wisdom.
I've read her stuff for years and heard her years ago on radio and tv when I lived North of the border. Yes, a chartist. Technical stuff. That sort of data has to be considered. I looked askance when, a number of years ago, she asserted something about being in an up-cycle within an ongoing bear market that will last 17 years or so. Huh? On the other hand, she is certainly not running with the pack. She certainly does not ---to me --- come across as glib, flashy and full of bullshit jargon like you'll find on CNBC.
I can't manage to feel bad about my funds generally doing very well over the last several years, since the Crash of '08-'09. (I never left the Market. I rode it down, then back up.) Secular bear? Hmmmm. ...Is she correct? As with them all, it's a matter of degree. With regard to some particular details over the years, I agree with her. And I can admit that maybe she leans the way I do, politically, so I WANT to "trust" her. I just rediscovered her site and thought I'd share this item.
In this world of cognitive biases, an expert is the one that confirms your biases to be used to appeal to authority for your opinions and the rest considered part of the charlatan group since experts as a whole don't do well in the standards we set for them.
Whatever happened to just considering an opinion and evaluating its merits based on whether it is logical, informed and consistent? In a world of probabilistic events, a standard for forecasting success is a foolish endeavor even if it can be measured meaningfully.
She says in her article today, 6/2/2014, http://jugglingdynamite.com/ Eyes wide open: which market participant are you? Posted on June 2, 2014 by Danielle Park
that the Russell 2000 has a forward P/E ratio of 83.
That appears to be incorrect. The WSJ says it has a trailing twelve months P/E of 83.8, but that the forward P/E is 18.85
That's something I do barely understand, but don't know how to use effectively--- the P/E. Anyhow, 83.8 is way too high for me to want to buy any small caps at the moment. Even 18.85 is pricey. Thanks for letting me know.
Crash, I'm agreement with you. I'm not interested in small caps at a forward P/E of 18.85. Just like you said, pricey. I feel much more comfortable with the Dow 30 at a forward P/E of 14.91, or the S&P 500 at 16.38
Anyhow, back to funds, specifically. I cannot ever find the right time to rebalance and even-out my spread, with regard to one particular item. I have been holding Matthews ---4 of them, 3 are in Trad. IRA. They have been in the doldrums, then suddenly have been rising over the last couple or few weeks. I own MAPIX (biggest holding, way out of line.) And MAFSX and MAINX and MACSX--- MACSX is in a joint account with wifey. ...So: it's a nice problem to have. And of course, there IS no perfect time to do just about anything. I'm letting MAPIX ride, but it is literally creeping up to 30% of my total holdings. I'd love to get it down to the "rule of thumb" maximum: no single holding should be bigger than 20% of total. But it IS just a rule of thumb. No one has a gun to my head about this business...
Comments
Is there a special notation we should be aware of, regarding Ms. Park; relative to the viewpoints in the linked article?
Thanks.
Catch
"money slump flashes warnings"
"the Fed (has) a grim choice"
"below stall speed"
"(failure to reach) escape velocity"
"...cliff-edge drop"
"Japan style trap"
"too awful to think about..."
"a Catch22 decision (for the Fed)"
None of this is to dispute her thesis of fiscal and financial catastrophe. A case can be made for or against. But, IMHO, Ms. Park's literary style is better suited for fiction than for serious financial analysis.
--
Regards,
Ted
As you know, I’ve been recently campaigning on MFO to recognize that experts really often fail to forecast accurately.
One part of my skepticism is based on defining what factors integrate to establish the credentials for an “expert rating”. A second part addresses the processes that the expert deploys to reach his/her forecasts. A third part deals with the expert’s accumulated record. The proof is ultimately in the pudding.
I am doubtful that Danielle Park satisfies any of these components.
Park was trained and worked as a lawyer, not a financial expert, until just before 2000. Her most notable accomplishment was her “Juggling Dynamite” book which was published in 2007. She became a expert in an amazingly short period.
Park is a chartist. She trusts technical analyses, but also talks meta-macroeconomic influences. I am not familiar with any references that reveal how her charts and meta-analyses are integrated together to form an opinion of market direction. The details of her decision process are a closed book.
Overall, Park has been mostly a Bear market advisor. As early as about 2000 ( she was nearly a rookie at that juncture in her investment career), she projected a secular Bear market for the next 20 years. Most recently, she remains bearish on the investment climate, and has positioned her clients in non-equity holdings. Her frequent defensive positioning must have burdened her customers with opportunity cost penalties. Her scorecard remains a mystery, but I doubt it is very impressive.
At some point, Danielle Park’s negative market perspective will be correct, and the media will proclaim her a soothsayer of the first order. I will not. I do not rate her as an expert; she is merely a talented financial saleswoman.
So, I’ve made a full circle. Experts are often overrated, and do no better at forecasting than you or I could do. There are exceptions. The trick is to discover these rare experts in time to exploit their wisdom.
Best Wishes.
I can't manage to feel bad about my funds generally doing very well over the last several years, since the Crash of '08-'09. (I never left the Market. I rode it down, then back up.) Secular bear? Hmmmm. ...Is she correct? As with them all, it's a matter of degree. With regard to some particular details over the years, I agree with her. And I can admit that maybe she leans the way I do, politically, so I WANT to "trust" her. I just rediscovered her site and thought I'd share this item.
Whatever happened to just considering an opinion and evaluating its merits based on whether it is logical, informed and consistent? In a world of probabilistic events, a standard for forecasting success is a foolish endeavor even if it can be measured meaningfully.
Eyes wide open: which market participant are you?
Posted on June 2, 2014 by Danielle Park
that the Russell 2000 has a forward P/E ratio of 83.
That appears to be incorrect. The WSJ says it has a trailing twelve months P/E of 83.8,
but that the forward P/E is 18.85
http://online.wsj.com/mdc/public/page/2_3021-peyield.html
I feel much more comfortable with the Dow 30 at a forward P/E of 14.91, or the S&P 500 at 16.38
http://online.wsj.com/mdc/public/page/2_3021-peyield.html
In the tech bubble of 1999-2000, the Nasdaq P/E went to 100 !
and the S&P 500 P/E went to 32