The Great Depression

  • Benjamin Roth: The Great Depression: A Diary

    Benjamin Roth: The Great Depression: A Diary
    It's all here, times change people don't -the endless govt programs that fail to stimulate the private sector -the ups and downs of the economy, the veterans pension stimulates just as the housing credit did, until of course the money runs out -Roth is a attorney in Youngstown Ohio who kept a diary regarding the economy from 1930 until WW II breaks out, he is objective, candid, and forthright which is more than we get from Washington DC now or then highly recommended

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February 27, 2012


Julie Turner

I have been reading his quarterly letters since Nov. of 2010. Regarding his macro view and asset bubble observations, I have to respect his wisdom, but I don't understand a few things. I have the transcript of his interview with CNBC from Nov. 11 2010. He was advising institutional clients to sell into that rally. The S&P was around 1150 at the time. He said stocks were overpriced, fair value on the S&P was around 950 and cash was the avenue for investors. Now that the S&P is at 1350, I wonder why he isn't offering the same advice...

Dennis Elam


An excellent question on your part! My point was that this letter seems to be of the buy and hold variety, I cannot tell that he recommends selling and apparently that is your conclusion as well. And he has so much to say that, whatever happens I am sure he will be able to grab a life ring later from somewhere in the hundreds of words.

All the indicators we follow like BP and summation index are flashing sell signals, my update this morning on Junk Funds and the Surprise Index seem to confirm our thinking.

A realistic answer is that BIG fund managers like himself, with I am sure billions of dollars to invest, like Congress in a pickle, need to show that they are doing SOMETHING! As a fund manager clients are reluctant to pay you to sit in cash, as I am pretty much now.

And so we get various rationales for doing what they are doing whether that really makes sense or not.

If you and I are managing our less than one million bucks in an IRA, we can see the wisdom, of finding good entries at market lows, riding them up, and then exiting. That is not the case for someone managing billions of dollars, they never really exit the market. Their idea of exit is rather to re balance and shift money from stocks to bonds. But oddly his favorite pick is Emerging markets which are the most overheated in the world right now.

Thanks for this excellent question, one reader suggested I synthesize the blog into a book, and your question, why are professionals always long the market, needs to be answered in such a book.

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