As one of my favorite analysts, Sherlock Holmes, always said, "sometimes, there is nothing more deceptive than an obvious fact." There is nothing to be contrarian about when it comes to this chart.
Michigan Consumer confidence got absolutely crushed this week, coming in at 57. Finally, instead of having to endure these last 9 months of hedge fund hotel screaming in my inbox about how I am being too bearish on where the US consumer is headed next, the worst report since 1978 will remind them that the 1970's were not a good time to "buy on valuation" (stocks troughed at 8x EPS).
My World Series Consumer team of Brian McGough, Howard Penney and Todd Jordan have been doing outstanding cycle work as of late. Managing tail risk is what we do, and the US consumer spending scenarios that they have come up with for 2009 are a long long way from consensus. This ain't Kansas, and I ain't Toto. This is math.
Be careful out there if you are getting levered up long in Consumer Discretionary. Your idea is interesting, but it’s not unique, and it’s too early. Within our RE sentiment framework of “Bullish, Bearish, and Not Enough” of one or the other, I still do not think that consensus is "Bearish Enough".
KM
Michigan Consumer confidence got absolutely crushed this week, coming in at 57. Finally, instead of having to endure these last 9 months of hedge fund hotel screaming in my inbox about how I am being too bearish on where the US consumer is headed next, the worst report since 1978 will remind them that the 1970's were not a good time to "buy on valuation" (stocks troughed at 8x EPS).
My World Series Consumer team of Brian McGough, Howard Penney and Todd Jordan have been doing outstanding cycle work as of late. Managing tail risk is what we do, and the US consumer spending scenarios that they have come up with for 2009 are a long long way from consensus. This ain't Kansas, and I ain't Toto. This is math.
Be careful out there if you are getting levered up long in Consumer Discretionary. Your idea is interesting, but it’s not unique, and it’s too early. Within our RE sentiment framework of “Bullish, Bearish, and Not Enough” of one or the other, I still do not think that consensus is "Bearish Enough".
KM
