"TAP não sobrevive se se mantiver pública", garante Pinto Luz

[Ulisses Pereira]

Em contraponto com este artigo "bearish", deixo aqui um artigo "bullish" do Doug Kass. Curioso ver opiniões diametralmente opostas de dois analistas que gosto de ler e que têm argumentos muito interessantes.

Finding Silver Linings in the Market


By Doug Kass
Street Insight Contributor
5/24/2004 4:03 PM EDT




"Now I been out in the desert, just doin' my time
Searchin' through the dust, lookin' for a sign.
If there's a light up ahead, well brother I don't know
But I got this fever burnin' in my soul
So lets take the good times as they go
And I'll meet you further on up the road."

-- Bruce Springsteen's "Further On (Up The Road)"

Amid investor apathy that is bordering on despair (reminiscent of the old New York Mets' saying -- "Can't anyone play this game?"), the ingredients for a better-than-expected second half of 2004 for equities and bonds are becoming clearer.

I am now adjusting my expectations for a mid- to high-single-digit negative return year (we are already almost there) to a mildly positive year for the senior averages, with an eye toward an even better year under a set of more optimistic conditions (which The Edge will closely monitor). I also think fixed income can be based on the expectation of a 25-50 basis-point decline in the yield of the 10-year U.S. note.

The recent market dive and the economic pause that I anticipate -- to borrow a phrase from Benjamin Graham -- have provided a margin of safety in the equity markets that we have not had for some time.

To borrow from another Ben -- Benjamin Stein -- who wrote yesterday's New York Times article titled, "Calm Down. That Wolf at the Door Has Been Here Before..."


"Lately, even more than usual, the word of the day is fear. Fear of inflation and rising interest rates. Fear of oil shortages. Fear of rising energy prices, which is closely related. Fear of terrorism. Fear of rising -- and of falling -- commodity prices. Fear of a growth spurt in China -- and of a slowdown in China. Fear of an excessive trade deficit, and of too much debt at both the federal and household levels. Fear that the global climate is changing - and, now, that the earth is growing darker year by year (although it is possible that the glass cases covering the measuring devices became dusty)."
Here are a list of factors that have served to make me more optimistic and have expanded that margin of safety.


Inflationary influences have moderated just when most participants have become scared of the prospect of higher inflation.

The recent drop in the prices of industrial commodities (steel, copper, etc.) will more than offset the rise in prices of the energy complex. As to crude, my view is that the price of oil is not materially different (I do recognize the more unique supply issues) than the aforementioned commodities. From my perch, oil is ready for a fall, and the backward movement in the oil futures market is supportive of this notion. Either way, energy as a percentage of the domestic economy is down to only about 6% of GDP (half of the level of the mid-1970s). Look for bonds to rally as oil falls.

Anti-Federal Reserve/Greenspan rhetoric is overdone as the economy effectively transitions into a slower, though sustainable, rate of growth.

Although I was at odds with a number of Greenspan moves during the bubble, that was then and this is now. Indeed, the markets have already tightened, as de facto jawboning has been successful in producing an economic pause that refreshes (and which Greenspan already sees). As well, the all-important housing sector is about to embark on its own soft landing as compared to my prior expectations of a crash. (Note: I have covered my homebuilder shorts.)

Regarding the market doing the tightening work for the Fed: 2004 is beginning to resemble 1996, not 1994. Some might recall that the fixed-income markets tightened for the Fed eight years ago, and after a period of flat/subdued equity performance, stocks took off in the second half of 1996.


Be greedy when others are fearful.

Share prices have adjusted to a world without stimuli. The time to be bearish was months ago, before interest rates rose and inflation resurfaced, when Phelps Dodge (PD:NYSE - commentary - research) traded at $90, not $64; Citigroup (C:NYSE - commentary - research) traded at $53, not $45; Centex (CTX:NYSE - commentary - research) traded at $58, not $44; and Cisco (CSCO:Nasdaq - commentary - research) at $29, not $21. As I wrote last week, I prefer to anticipate events -- by the time they are on the tape, it's too late to respond.


Several of my prior concerns have either disappeared or moderated.

For example, the "Deficits of Mass Destruction of 2004" seems likely to fall some $100 billion from the previous forecast made by the Office of Management and Budget. As well, the recent unexpected jump in jobs created suggests that some of my concerns regarding the consumer (spent-up, not pent-up) might be delayed, as real wages and disposable incomes will hold up better than I previously thought. This all means that economic growth will decelerate, but to a solid level and not at the accelerated rate I previously thought.

Sentiment conditions are at levels that are typically associated with market bottoms.

Our own analysis of Merrill Lynch's internal put/call ratio (a great measure of retail sentiment) supports this conclusion, as does the weakening mutual fund inflows and other measurements like the renewed popularity of the Rydex short funds. So does the big fat put/call ratio, which hovered around 1.40 on Friday, as well as a very high Trin. As I mentioned previously, sentiment is closing in on despair. If you don't believe me, read Mark Hulbert's persuasive "At Least the Contrarians are Smiling" in yesterday's New York Times business section, in which he writes:


"The three dozen newsletters monitored by The Hulbert Financial Digest that try to time the market's short-term swings have turned remarkably bearish in recent months. They now have a recommended equity exposure, on average, of minus 13.5%. That means that the average market timer in this group is not only recommending that subscribers avoid stocks, but that they allocate about one-eighth of their portfolios to going short the stock market -- a bet that the market will decline."

The spectre of terrorism and worldwide political instability will be with us for some time, but the shift of authority and security in Iraq to the Iraqis will occur in the next few weeks.

Despite some highly visible atrocities and screw-ups in strategy (most recently the Ahmad Chalabi situation), the Middle East has arguably begun to move away from the chaos of the Saddam Hussein regime and toward more stability.


The odds favoring a Bush win appear to be rising (a positive market influence) -- despite the mess in Iraq, higher interest rates and rising inflation.

Surprisingly, Sen. Kerry has not meaningfully improved his lot in the polls despite the recurring and visible difficulties in the Middle East, and he actually appears to be shooting himself in the foot with his recent scheme to delay his acceptance of the Democratic presidential nomination in order to circumvent federal election laws -- and use that additional time to his political/financial advantage. What happens to President Bush's standing when economic statistics continue above trend-line levels, as they likely will, and there is some good news in Iraq, which at some time there almost certainly will be?


The demise of China and Japan -- two important regions at the margin of the world economies -- are greatly exaggerated.

China's growth is slowing, but to a more orderly and sustainable rate. And I remain impressed with the recovery in Japan, particularly bank reform measures.

To summarize, from my viewpoint, there appears to be a number of reasons to be more bullish. To be sure, many of the headwinds I have addressed on The Edge are still in place, but their forces have subsided.
"

(in www.realmoney.com)

[Ulisses Pereira]

Muito interessante este artigo "bearish" do John Roque.

Um abraço,
Ulisses

"Cut Through the Consensus"


By John Roque
Special to RealMoney.com
5/24/2004 12:00 PM EDT


"Everybody's trying to figure out sentiment. At meetings you ask, "What do you think of the market?" Talking on the phone, you inquire, "How do you like the market?" When you pass colleagues as they exit the "executive" washroom, you ask, "How's the market treating you?" Sitting at your desk, you wonder, "Hmm, if I started smoking, I could be downstairs right now asking the smokers about the market." You do all of this with the aim of trying to determine consensus opinion.

But you're not the only one. Everyone is doing it, because nobody has an edge on what will happen next. However, the sentiment trade is pretty crowded, because everyone's trying to outgame everyone else using anecdotal information about sentiment. I could be wrong, but crowded trades rarely work well. Here's what the "consensus" is thinking, followed by my responses.


"The S&P 500 is oversold and on its 200-day moving average. This is a good sign. The market can rally here."

Short-term oversold readings are there, but as the S&P is not below its 200-day moving average, it's a stretch to say it has corrected enough to generate a big move. Good oversold readings occur when the index is about 10% below its 200-day moving average. The S&P 500 has held its 200-day moving average for 10 days, but shouldn't it have bounced already? Strong stocks and markets bounce quickly off support. So far, the S&P's inability to bounce off its 200-day moving average is a concern.


"The rate rise is discounted already."

OK, nearly everyone is on board with respect to rising interest rates. But they believe rising rates won't be bad. With the annual rate of change on the two-year Treasury note yield rising faster than it did in 1987, 1994 and 1999, I'm going to stay cautious.

"People are bearish. Nothing's working. That means a bottom is near."

I don't think people are bearish; I think they're aggravated, disappointed and dumbfounded. How can they be bearish when they all tell us that the fundamentals are so good? They're aggravated, disappointed and dumbfounded because they can't understand how they can be down on the year if the fundamentals are so strong and a "global synchronous recovery" is taking place.

One of my buddies emailed me Friday and said, "Everyone says sentiment is so bearish, and that's why they are bullish. But if everyone is bullish 'cause they think sentiment is bearish, then sentiment is not bearish!" My buddy is one sharp cookie!


"Put/call ratios are high. That's a good sign and another reason to believe we can bounce."

The put/call ratio is high (puts are high relative to calls), and that implies investors are less complacent and more cautious than they'd been. Such action usually precedes or coincides with a market turn after a corrective phase. But just like the argument "The market is on support and should bounce," if put/calls are so high and the market doesn't bounce, that's a negative sign.


"Company fundamentals are so good, and managements are telling us things haven't looked this good for a long time."

OK, that's probably a plus. But weren't they also telling us that everything was awesome and we were in a new paradigm in late 1999 and early 2000? Weren't they also telling you they had "no visibility" in early 2003? I don't know about you, but I'm not too confident of management's ability to forecast the market and stock-price action.


"The market's range-bound."

What's the range? Range-bound sounds good, but nobody wants to define it. I think the top of the range for the S&P 500 is 1150-1175. I'll be more confident about the bottom of the range when the S&P breaks 1075.


"The pain trade is up, not down."

If everyone thinks we should bounce, then how can the pain trade be up? If everyone believes fundamentals are good, then how can the pain trade be up? If hedge funds are not net short, how can the pain trade be up? The pain trade is already on, and it's the market right now. The market can definitely rally -- but that's not the pain trade.

"It's gonna be 1994 all over again."
This is very popular. I don't think it's like '94 because (a) '94 occurred within the context of a secular uptrend, and I don't believe it is still in place; and (b) while George Santayana said, "Those who cannot remember the past are condemned to repeat it," Steve Shobin said, "History repeats, but never in detail." I'm going with Shobs.


"The transports are showing relative strength and haven't broken despite oil at $40. This is a good Dow Theory sign."

This is a good sign and a market asset. As long as the Dow Jones Transportation Average stays above 2700, it gets the benefit of the doubt.


"Oil is weighing down the market. If oil drops, this market is going to rocket."

This makes sense. I noticed, however, that the following news item Friday -- "OPEC Should Boost Output 2 Million Barrels/Day" -- didn't create any upside fireworks. As another buddy opined Friday, "We're all waiting for Saudi Arabia to save the bull." If the market is unable to embrace the oil output info, it'll mean we have more problems than we think. "

(in www.realmoney.com)


"Intel (INTC:Nasdaq - commentary - research) looks good here, and the Philadelphia Stock Exchange Semiconductor index has good relative strength. Both will rally."
Talk about crowded trades. If I had a spumoni for every time I heard this one over the past week, I'd be in spumoni heaven (or the closest equivalent -- L&B Spumoni Gardens on 86th Street in Bensonhurst). Despite being a crowded trade, Intel can definitely rally and so can the semis. However, I still believe Intel positions should be reduced anytime the stock is near $30.