Keep Your Eye on the Ball

“We have had a great run in equities, emerging market currencies, credit and other risky assets, now people are struggling to justify lofty valuations,” said Alan Ruskin, strategist at RBS Securities. He added: “The ‘green shoots’ argument for the economy was very tentative to start with.”

“The smartest players in the US stock market – the top insiders who run public companies – are not betting their own money on an economic recovery,” said Charles Biderman, chief executive of TrimTabs.

Pessimistic executives cash out of shares – The Financial Times

You have to wonder if their strategy is simply to hope that nobody notices that they are lying sacks of shit, laying down confidence trick, after confidence trick

Sven sent me a link to the graph below, which adequately makes the point:

image002

The rather amusing note that accompanies this:

If graph has a red background, S&P 500 is fully priced by this measure as of the above date.

If graph has a green background, S&P 500 is considered to be undervalued. See Yes, You Can Time the Market for more guidance in interpreting these graphs.

“[F]ully priced” … hehe.

If the regulators hadn’t made shorting mostly illegal / dangerous it’d be a natural time to be betting that this can’t hold and taking short positions in SPY.

Wise words...

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