Author Topic: Paul Singer warns of "Market Breakdown"  (Read 4020 times)

chad

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Paul Singer warns of "Market Breakdown"
« on: August 19, 2016, 06:14:12 PM »
See here:

http://www.zerohedge.com/news/2016-08-18/paul-singer-says-everyone-dark-warns-sudden-intense-market-breakdown

I accept that we can't time the market or have any confidence about what is going to happen in the short- or even mid-term. But what do you make of a guy like this making these sorts of predictions? It's not like he's dumb or something. And yet it seems dumb to me to make such a prediction. Not sure what to think.

Psychstache

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Re: Paul Singer warns of "Market Breakdown"
« Reply #1 on: August 19, 2016, 06:15:42 PM »
It's from zerohedge. Safe to ignore it.

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ender

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Re: Paul Singer warns of "Market Breakdown"
« Reply #2 on: August 19, 2016, 06:18:26 PM »
People make those sorts of predictions on a regular basis.

chad

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Re: Paul Singer warns of "Market Breakdown"
« Reply #3 on: August 19, 2016, 06:22:14 PM »
Right, I agree: such predictions appear on a regular basis, it's safe to ignore them, etc. That's my approach too. But what I'm asking is: do we just say that the guy is being a moron in making this prediction? Seems like he's not ordinarily given to being a moron.

chad

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Re: Paul Singer warns of "Market Breakdown"
« Reply #4 on: August 19, 2016, 06:23:06 PM »
In other words, I find this sort of thing puzzling.

waltworks

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Re: Paul Singer warns of "Market Breakdown"
« Reply #5 on: August 19, 2016, 08:35:32 PM »
If he's right, everyone will think he's a genius.

If he's wrong, he can try again next year and mostly everyone will have forgotten how many years in a row he was wrong.

It's a great play if you want people to pay you to prognosticate about finance.

-W

WerKater

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Re: Paul Singer warns of "Market Breakdown"
« Reply #6 on: August 20, 2016, 12:48:10 AM »
If he's right, everyone will think he's a genius.

If he's wrong, he can try again next year and mostly everyone will have forgotten how many years in a row he was wrong.

It's a great play if you want people to pay you to prognosticate about finance.

-W
This. Predict disaster often enough and one time you will actually be right. Especially if you are sufficiently vague on when exactly what exactly will happen. If I recall correctly, the stock market experienced a 10% drop every 11 months in the past. There are enough morons out there who will take such a (perfectly meaningless) drop as proof that this guy knows what the fuck he is talking about.

MoonLiteNite

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Re: Paul Singer warns of "Market Breakdown"
« Reply #7 on: August 20, 2016, 01:31:19 AM »
If he's right, everyone will think he's a genius.

If he's wrong, he can try again next year and mostly everyone will have forgotten how many years in a row he was wrong.

It's a great play if you want people to pay you to prognosticate about finance.

-W
This. Predict disaster often enough and one time you will actually be right. Especially if you are sufficiently vague on when exactly what exactly will happen. If I recall correctly, the stock market experienced a 10% drop every 11 months in the past. There are enough morons out there who will take such a (perfectly meaningless) drop as proof that this guy knows what the fuck he is talking about.

This.
If every 3 months someone with a name for themselves says it, one of them HAS to be right at some point.

arebelspy

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Re: Paul Singer warns of "Market Breakdown"
« Reply #8 on: August 20, 2016, 04:22:59 AM »
The first paragraph of the linked article even notes that this guy is KNOWN for continually predicting disaster with regards to the market:
Quote
one name has been a staple when it comes to warnings about the disastrous consequences of the new normal's monetary policy: Elliott Management's Paul Singer.

He hasn't been right the last 6 years.  Maybe he will be this year, maybe not.

At some point, we'll have a crash.  Okay?

Stay the course.
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chad

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Re: Paul Singer warns of "Market Breakdown"
« Reply #9 on: August 20, 2016, 08:00:00 AM »
So you guys think he's just a moron? Or he's dishonest and he's saying this, while knowing it's false, in order to trick people into thinking he knows what he's talking about? These seem like implausible explanations.

I think he's making some kind of understandable error. Maybe, since he's good at picking individual stocks, and he doesn't see any good bets right now, he (mistakenly) draws the conclusion that the market is in poor shape. That seems like an understandable error, although to be honest it still seems a little stupid to me. It would be satisfying to me if we could see a real rationale for him to say these sorts of things that do not involve calling him stupid or a liar, even if the rationale is ultimately in error.

frugledoc

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Re: Paul Singer warns of "Market Breakdown"
« Reply #10 on: August 20, 2016, 08:56:19 AM »
My IPS demands that I ignore all these articles.


Classical_Liberal

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Re: Paul Singer warns of "Market Breakdown"
« Reply #11 on: August 20, 2016, 09:20:47 AM »
So you guys think he's just a moron? Or he's dishonest and he's saying this, while knowing it's false, in order to trick people into thinking he knows what he's talking about? These seem like implausible explanations.

I think he's making some kind of understandable error. Maybe, since he's good at picking individual stocks, and he doesn't see any good bets right now, he (mistakenly) draws the conclusion that the market is in poor shape. That seems like an understandable error, although to be honest it still seems a little stupid to me. It would be satisfying to me if we could see a real rationale for him to say these sorts of things that do not involve calling him stupid or a liar, even if the rationale is ultimately in error.

I don’t know much about the author, but here is a benefit of the doubt analysis

Stocks are stocks, over the 30- 50 year time horizon most people on this forum are investing some buys will be low, some will be high, and most somewhere in between. Right now stocks seem pricy, oh well.   There is rarely cause for alarm in long term stock investing.  Smart asset allocation, low expenses and stick with it.  There will always be talking heads screaming the sky is falling and sometimes it will.  Singer, however, seems more concerned about bonds.

Many cannot stomach 100% equity portfolios and opt for a percentage to be in “safer” assets.  Generally, safer means less potential capital loss in exchange for lower returns and hopefully not highly correlated to their equity position.  I think the general tone of the article is that bonds have filled this role very well over the past 40+ years.  This may not be as true over the next 10+ years.  Frankly this isn’t a huge problem for someone who is 100 or 75 percent equity invested.  I worry about boomers, like my parents, who in their 60’s are being told by financial planners that they should be looking at 50-70 percent bond allocation, to be “safe”.  This is at a time when bonds are very expensive.  CD ladders are only 25 or 50 basis points off of 10 year treasury yields.  While CDs have virtually zero capital loss potential (ignoring inflation), bonds with such low yield have a very high potential for at least some capital loss over the next decade.

A bond market decline may or may not negatively impact equities, but the equities will eventually rebound as long as earnings grow (hint: over time they always will).  Buy a 10 year treasury at 1.5% yield, inflation eventually picks up to 2-3 percent and you’re taking a big capital loss that will never recover.

arebelspy

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Re: Paul Singer warns of "Market Breakdown"
« Reply #12 on: August 20, 2016, 03:16:11 PM »
So you guys think he's just a moron? Or he's dishonest and he's saying this, while knowing it's false, in order to trick people into thinking he knows what he's talking about? These seem like implausible explanations.

I think he's making some kind of understandable error. Maybe, since he's good at picking individual stocks, and he doesn't see any good bets right now, he (mistakenly) draws the conclusion that the market is in poor shape. That seems like an understandable error, although to be honest it still seems a little stupid to me. It would be satisfying to me if we could see a real rationale for him to say these sorts of things that do not involve calling him stupid or a liar, even if the rationale is ultimately in error.

He says this stuff all the time.  There has to be major cognitive dissonance to predict market failure for years without it happening, yet still continue to claim it's right around the corner, that you're right, everyone else is wrong, etc.

Yes, I think he's an arrogant idiot.  Doesn't seem implausible to me at all.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Spork

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Re: Paul Singer warns of "Market Breakdown"
« Reply #13 on: August 20, 2016, 04:14:05 PM »
So you guys think he's just a moron? Or he's dishonest and he's saying this, while knowing it's false, in order to trick people into thinking he knows what he's talking about? These seem like implausible explanations.

I think he's making some kind of understandable error. Maybe, since he's good at picking individual stocks, and he doesn't see any good bets right now, he (mistakenly) draws the conclusion that the market is in poor shape. That seems like an understandable error, although to be honest it still seems a little stupid to me. It would be satisfying to me if we could see a real rationale for him to say these sorts of things that do not involve calling him stupid or a liar, even if the rationale is ultimately in error.

He says this stuff all the time.  There has to be major cognitive dissonance to predict market failure for years without it happening, yet still continue to claim it's right around the corner, that you're right, everyone else is wrong, etc.

Yes, I think he's an arrogant idiot.  Doesn't seem implausible to me at all.

Caveat: I've never followed this guy.  I know absolutely nothing about him.

I tend to side with those above that say he's not an idiot, but he's doing it on purpose.  He WILL be right some day.  He's waiting until then so he can swoop in and say "If you had been smart enough to follow my simple plan...   Won't you start now?"

But in the mean time: carry on.  Even if/when it does correct, life will be okay.  If it isn't, then the crash was so big that everyone is fucked, so it just won't matter if you'd planned on it or not.

Mostly unrelated, but relateable side comment:  Well known skeptic and debunker James Randi is said to wake up every day and put a note in his wallet that says "I predict I will die on <insert today's date>".  He knows he will be right some day and thinks it will be a funny last joke.

RWD

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Re: Paul Singer warns of &quot;Market Breakdown&quot;
« Reply #14 on: August 20, 2016, 04:23:24 PM »
It's from zerohedge. Safe to ignore it.

That's where I stopped too.

matchewed

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Re: Paul Singer warns of "Market Breakdown"
« Reply #15 on: August 21, 2016, 06:14:48 AM »
So you guys think he's just a moron? Or he's dishonest and he's saying this, while knowing it's false, in order to trick people into thinking he knows what he's talking about? These seem like implausible explanations.

I think he's making some kind of understandable error. Maybe, since he's good at picking individual stocks, and he doesn't see any good bets right now, he (mistakenly) draws the conclusion that the market is in poor shape. That seems like an understandable error, although to be honest it still seems a little stupid to me. It would be satisfying to me if we could see a real rationale for him to say these sorts of things that do not involve calling him stupid or a liar, even if the rationale is ultimately in error.

No what's important is what you think. Why do you think the guy makes predictions over and over and over and they are wrong? In the end the reason why almost doesn't matter. Rather should you listen to someone who is consistently wrong?

aspiringnomad

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Re: Paul Singer warns of "Market Breakdown"
« Reply #16 on: August 21, 2016, 03:15:50 PM »
To clarify, he's focused on the bond market breaking down, not equities which most people tend to worry about when hyperlinking hyperbolic zerohedge articles. This is a bit different, and to be fair, the bond market is in the midst of a historic rally and it's hard to see substantial upside given where rates are. Other bond people, like Bill Gross, have also predicted troubled waters ahead for bonds based on a bit of theory and maybe some real world experience. But, just as in prognostications about the stock market, these guys surely fail to account for all the million of variables (some unknowable) that affect the bond markets. But as others have pointed out, fund managers aren't paid to be humble indexers.

And what if you believe him anyway? What do you do? Rotate more of your allocation away from bonds? Into stocks then? Cash? Who the hell knows what the right answer is? As others said, best to just stay the course.

CorpRaider

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Re: Paul Singer warns of "Market Breakdown"
« Reply #17 on: August 21, 2016, 06:14:39 PM »
So you guys think he's just a moron? Or he's dishonest and he's saying this, while knowing it's false, in order to trick people into thinking he knows what he's talking about? These seem like implausible explanations.

I think he's making some kind of understandable error. Maybe, since he's good at picking individual stocks, and he doesn't see any good bets right now, he (mistakenly) draws the conclusion that the market is in poor shape. That seems like an understandable error, although to be honest it still seems a little stupid to me. It would be satisfying to me if we could see a real rationale for him to say these sorts of things that do not involve calling him stupid or a liar, even if the rationale is ultimately in error.

He's an ideologue.  Yes, Charlie Munger would call him part of the "idiot fringe."

hodedofome

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Re: Paul Singer warns of &quot;Market Breakdown&quot;
« Reply #18 on: August 21, 2016, 06:40:05 PM »
It's from zerohedge. Safe to ignore it.

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Stay far away from zerohedge.

mrpercentage

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Re: Paul Singer warns of "Market Breakdown"
« Reply #19 on: August 21, 2016, 06:54:33 PM »
It's has been increasing in frequency lately. A lot of big names from Ican to Soros to Gross are all saying something is wrong. Long term optimism pays but long term recklessness does not. Unleverage if you are.

That's my 2 cents.
That's why I have a big lump sum in limbo not waiting for the bottom but just something more reasonable.

China, Brexit, interest rates, Bond bubble, and "multiple expansion"

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One Noisy Cat

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Re: Paul Singer warns of "Market Breakdown"
« Reply #20 on: August 21, 2016, 07:02:16 PM »
In a half century of investing I've learned markets go up, they waffle sideways and they go down. But as long as you have a good, solid reasonable plan, stay the course and have a wee bit of luck in health, etc  you will be alright.

Does Mr Singer pattern his beard after Stan Fischler (hockey writer)???

Bicycle_B

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Re: Paul Singer warns of "Market Breakdown"
« Reply #21 on: August 21, 2016, 07:07:06 PM »
So you guys think he's just a moron? Or he's dishonest and he's saying this, while knowing it's false, in order to trick people into thinking he knows what he's talking about? These seem like implausible explanations.

I think he's making some kind of understandable error. Maybe, since he's good at picking individual stocks, and he doesn't see any good bets right now, he (mistakenly) draws the conclusion that the market is in poor shape. That seems like an understandable error, although to be honest it still seems a little stupid to me. It would be satisfying to me if we could see a real rationale for him to say these sorts of things that do not involve calling him stupid or a liar, even if the rationale is ultimately in error.

He says this stuff all the time.  There has to be major cognitive dissonance to predict market failure for years without it happening, yet still continue to claim it's right around the corner, that you're right, everyone else is wrong, etc.

Yes, I think he's an arrogant idiot.  Doesn't seem implausible to me at all.

Caveat: I've never followed this guy.  I know absolutely nothing about him.

I tend to side with those above that say he's not an idiot, but he's doing it on purpose.  He WILL be right some day.  He's waiting until then so he can swoop in and say "If you had been smart enough to follow my simple plan...   Won't you start now?"

But in the mean time: carry on.  Even if/when it does correct, life will be okay.  If it isn't, then the crash was so big that everyone is fucked, so it just won't matter if you'd planned on it or not.

Mostly unrelated, but relateable side comment:  Well known skeptic and debunker James Randi is said to wake up every day and put a note in his wallet that says "I predict I will die on <insert today's date>".  He knows he will be right some day and thinks it will be a funny last joke.

Ha ha ha!  Sure enough, it's funny already.