Technically Speaking: Picking Up Pennies In Front Of A Steamroller

“I take my hat off that you are able to continue picking up pennies in front of a steamroller. Reading your newsletter, I scratch my head in amazement at your ability to increase your exposures in a market you admit is the most expensive ever.” – @mlevin999

That was a comment I got on Twitter following a recent newsletter where I discussed increasing our exposure concerning our short-term “buy signals.” To wit:

“The uptick in money flows did allow us to add some exposure to portfolios in holdings we had taken profits in with the previous ‘sell’ signal.”

I can understand the confusion when this past week I discussed the issue of “If everyone sees it, is it still a bubble?

My confidence is rising quite rapidly that this is, in fact, becoming the fourth ‘real McCoy’ bubble of my investment career. The great bubbles can go on a long time and inflict a lot of pain, but at least I think we know now that we’re in one.”Jeremy Grantham

How do you square a long-term “bearish” outlook on future returns with a short-term “bullish” bias?


As discussed in “There Is No Way, This Doesn’t End Badly,” virtually every measure of fundamental analysis suggests the markets are very expensive.

“10-year forward returns are below zero historically when the price-to-sales ratio is at 2x. There has never been a previous period with the ratio climbing to near 3x.”