One of the things we pride ourselves in is the fact that we do not take public information for face value, nor do we even contemplate the sources very much. That seems risky right, but in realty what we are being sold and who’s selling it are about as trustworthy as a 3 year old holding an ice cream cone without giving it a lick. In fact, we are inundated with various reports from all over the World Wide Web, main stream media, etc.
This week’s note will begin by reiterating our bullish theme on the Natural Gas market. We have been clamoring for weeks about both the technical and fundamental backdrop that continues to underpin this Bull Run.
Its kind of amazing how at certain points in time, things happen and they tend to be a wake up call – that is if we just open our ears and listen. We have talked at length about our disdain for the likes of the big investment houses and their pitching of zero fee fund management products.
This last week was full of reports of wide spread over valuations across the gamut of both global equity markets as well as global bond markets, especially Europe. Now we aren’t talking about some bobble headed main stream media types, we are talking about titans, the likes of Ray Dalio, Stan Drunkenmiller, Jeff Gundlach all relaying the same theme, “well above historical norms.” We even read a great piece on the PEG ratio from Fasanara Capital, which stated that the PEG, which is a statistical measure of how expensive a stock is relative to its ability to generate earnings, is well above 1999 highs and probably rightfully so given the plethora of cheap financing from zero rates, unprecedented HY rates and of course continued tax breaks. All that said, the pressure from the rhetoric from the guys we just mentioned should begin to mount, as they most certainly have an agenda attached to such warnings.
First of all, we would like to take a minute to remember all those that lost their lives some 17 years ago today. We will remember that day for quite some time, in fact it was on this day, a sunny crisp Tuesday morning that our phone lines went down to our trading partners inside One World Trade Center at Cantor Fitzgerald. We knew right there and then that something was up and we watched it unfold right before our eyes. Being on the floor of the CBOT, we evacuated and left the city for fear that we might be targeted next. We will never forget those and their families that were so tragically affected that fateful day and we will acknowledge their memorial this time every year for as long as we can.