February 4, 1999
Techs succumb to setback
Biggs echoed remarks by famed fund manager George Soros, who said last week he thinks the next incident of global turmoil is likely to hit closer to home because of what he sees as a dangerous "asset bubble" in the U.S.
December 5, 1999
Investors watching to see if stock, bond markets are ready to party
The best growth-stock strategy? Buy a well-diversified mutual fund, Siegel said.
The chart above shows the trading volume on the Nasdaq. The exponential trend is based on data up to and including the Nasdaq's peak price of 5,048.62 achieved on March 10, 2000. Like all unchecked exponential growth, it was eventually doomed to failure.
The chart above shows the deviation from the long-term exponential trading volume trend. I've included all 4 higher order polynomial trends to show just how dead that trend had become.
January 9, 2006
Soros predicts American recession
Mr Soros said he believed the US housing bubble, a major factor behind strong American consumption, had reached its peak and was in the process of being deflated.
October 3, 2006
Godfather of '90s boom says he's bullish about the current market
But Siegel says he's become more and more optimistic in recent weeks.
``The big fear that the economy is totally falling out of bed . . . I don't think that's going to materialize," he said.
The chart above shows new home sales. The exponential trend is based on the sales volume data from the low median selling price reached in 1989 to the high median selling price reached in 2007. As is seen in the chart, that trend was not sustainable nor was it even backwards compatible.
The chart above shows the deviation from the long-term exponential sales volume trend. I've once again included all 4 higher order polynomial trends to show just how dead that trend had become.
March 1, 2010
Soros Signals Gold Bubble as Goldman Predicts Record (Update2)
March 1 (Bloomberg) -- George Soros is helping drive up gold prices by doubling his bet in a market even he considers a “bubble” as Goldman Sachs Group Inc., Barclays Capital and HSBC Holdings Plc predict more gains before it bursts.
The chart above shows the trading volume in GLD. The exponential trend is based on the trading volume data from the fund's inception in 2004 to its record high price set in June. The concern for gold bugs here is that the trading volume is no longer following the exponential trend line.
The chart above shows the deviation from the long-term exponential trading volume trend. I've included all 4 higher order polynomial trends to show that the trend may be starting to roll over.
May 17, 2010
UPDATE 2-Soros unwound huge bet on Citi in first quarter
The filings show that Soros continued to hold a large stake in gold. His firm held a total of 5.6 million shares of the SPDR Gold Trust (GLD.P) worth almost $607 million at the end of the quarter. Soros owned 6.2 million shares of the gold exchange-traded fund worth $663 million at the end of 2009.
Aug 16, 2010
RPT-UPDATE 3-Soros favored gold, slashed big U.S. equities
The fund firm said it owned 5.24 million shares of the SPDR Gold Trust (GLD.P) worth $638 million as of June 30. Though down slightly from the fund's 5.59 million shares owned at the end of the first quarter, that was the fund's biggest holding by dollar value.
Soros told the world that gold was the ultimate bubble early this year. As seen above, he sold 15% of his GLD holdings over the last two quarters and unloaded his U.S. equities.
Meanwhile, Siegel is convinced that treasury bonds are in a bubble. We should instead embrace the stock market with open arms even after one of the most impressive stock market rallies in the history of mankind.
The chart above shows the trading volume in TLT. The exponential trend is based on the trading volume data from the fund's inception in 2002 to its record high price set in 2008. The concern here is that the bond market sees something Jeremy Siegel does not.
The chart above shows the deviation from the long-term exponential trading volume trend. I've included all 4 higher order polynomial trends to show that the trend may actually be starting to gather steam.
Hello deflationary mess? If so, we might be able to see it in the trading volumes of TIP. The inflation protected treasury bond fund was dragged down when the stock market crashed in 2008. On the off chance it repeats, I moved my IRA to cash a few days ago. I didn't feel the rewards for holding it through this Christmas season were worth the risks.
The chart above shows the trading volume in TIP. The exponential trend is based on the trading volume data from the fund's inception in 2003 to its record high price set in 2008.
The chart above shows the deviation from the long-term exponential trading volume trend. I've included all 4 higher order polynomial trends to show that like gold, the volume of trading in the inflation protected treasury bond fund may be starting to roll over.
It may not roll over though. Who really knows? I certainly don't think it is in a bubble. Part of the increased volume was due to the sell-off during the last deflationary event. That said, TIP is not exactly cheap right now. It's been rising in price on generally low volume and for what I think are the wrong reasons. Should we experience another deflationary event, TIP would be especially prone for a fall.
Source Data:
Yahoo: Nasdaq Historical Prices
U.S. Census Bureau: New Residential Sales
Yahoo: GLD Historical Prices
Yahoo: TLT Historical Prices
Yahoo: TIP Historical Prices
I should have mentioned that the housing data is in thousands of units.
ReplyDeleteSoros may be your foil to Siegel, but he may be burned by gold. Then again, that may be a tiny position for him. I wonder how much RMB he holds?
ReplyDeleteCoba
Coba,
ReplyDeleteBurned by gold for holding it too long or not long enough?
He certainly enjoys riding parabolas.
June 14, 2006
Rise of India positive for the world: George Soros
Let me ask you about what has been happening in commodities and currencies. Commodities has been such an incredible bull market.
It really has been sort of a parabolic rise and you know that it is something that cannot last very long and one also does not know how far it goes and the last bit is always the best bit. But they have broken now and I think commodities are in for a period of correction.
Also note that he did sell 15% of his GLD stake in the first two quarters. No idea yet what he's done in this 3rd quarter. I'd be a bit surprised if he didn't sell more though, especially at these prices. Who knows?
ReplyDeleteTrue. He's not a dummy. He can also afford a loss here and there if he makes it up in other areas.
ReplyDeleteBy the way, went out to a local pizza restaurant last night - found out it was out of business.
Coba
Coba,
ReplyDeleteFor what it is worth I ate at a McDonalds on Friday. I had the McDouble for $1 and the $1.29 small fries. I very nearly passed on the fries. Big spender!
While I was doing that I enjoyed the view of a plane pulling a Geico advertisement behind it. No joke!
The advertising worked apparently. I just told you about it. Well, maybe not. I didn't actually switch my insurance. Maybe you will though!
I find it interesting that Soros is selling shares and yet the media report is slanted bullishly by concentrating on the increasing dollar value and the fact that it's his biggest position. If one wasn't reading this carefully and paying close attention over time, one could well find oneself buying GLD from Mr. Soros all the while wrongly thinking one was buying GLD alongside Mr. Soros.
ReplyDelete<sigh> I guess if we didn't have our useful idiots we'd have to invent them. How else does one exit a multi-cenitmillion dollar speculative position in a paper proxy of a commodity, itself completely dependent on human sentiment for its value?
AllanF,
ReplyDeleteI know what you mean. There's a bull market in misleading headlines.
It wasn't even all that easy for me to show what Soros had done, and I had been following it closely out of curiosity.
I am definitely one of the few who has pointed it out.
I'd love to ask Soros a few off the record questions about his take on it. I'd wager he'd have some amusing commentary.
Siegel is a cheerleader. I decided to ignore him once and for all when I caught him trying to explain stocks were cheap, based on the multiple of projected future operating earnings. (Speaking of which, I wonder what the historical average of projected future operating earnings actually is?)
ReplyDeleteNot that Siegel is necessarily wrong, just because he's a fool. The future is opaque, as usual.
Paker Bohn,
ReplyDeleteWhat I wouldn't give to find a fool who is always wrong. Unfortunately, it takes a certain level of genius to be always wrong. Most fools are simply randomly wrong though, like a flipped coin. Sigh.
Reading through some old posts. It would be interest to see an update of this in regards to bonds and gold which both had major peaks since this was posted.
ReplyDeletejeff,
ReplyDeleteBased on your interest, I will update the charts within this post within the next week or so.
jeff,
ReplyDeleteNew charts up!