We’re not sure exactly what this means, except that it must mean something.
The New York Times has just published an article titled “The Rise Of The Permabears” featuring all of your favourite doomsayser like Albert Edwards (SocGen), Bob Janjuah (formerly of RBS, and soon Nomura) and newsletter writer Raoul Pal.
Perhaps the most interesting aspect is how being wrong really doesn’t matter much, so long as you’re interesting and provocative, such as the case of Pal, who claims to have a waiting list (really?) for his newsletter, which he writes from a holiday villa in Spain.
In fact, if you had been following the advice of Mr. Edwards or Mr. Pal over the past month as stocks have bounced, you would have lost money, as both men readily acknowledge. Mr. Edwards has advised investors to be heavily underinvested in all equities and Mr. Pal, in addition to being short, or betting against, the U.S. stock market, is also shorting the euro in his model portfolio.
Mr. Pal’s bad run began in 2009 when, after becoming bearish in 2007 and reaping the fruits in 2008, he was caught short by the powerful recovery that began in March that year. To date in his model portfolio, he has lost 96 per cent on a short bet of the Indian stock exchange, 68 per cent betting against the Chinese H share stock market and 68 per cent on the U.S. mutual fund company Franklin Templeton. (Until 2009, he says his model portfolio was up 700 per cent).
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