Edit (10:10) Below is the part of the update that conjured Otto. Note that it is not the preferred plan, but folks, it is certainly viable. If it kicks in, this would be deflation overtaking all efforts to stimulate, even as inflation is promoted 24/7. It is in fact, why I am only strongly bullish on one sector only. But even there, the bullishness would only be outwardly substantiated after the fact as rising gold stock prices reinforce the herd, and a new cycle begins. You know, wash, rinse... repeat. Gold stock fundamentals depend on a rise in gold's 'real' price, and that would be attended by deflation, manifested in declining prices of most everything else. This is where Prechter continually fails to get the memo.
Otto:
You read...too much Prechter.
It does not stand up to basic logic that his erroneous theory suddenly becomes right due to an external shock. It's an embarrassing chink in your market position just to see you mention his name...and that's even when you're using him as a contrary indicator.
Prechter is a marketing product built around one single correct call that happened 23 years ago. He's made himself a career and doesn't care about the derision he so rightfully gets because he gets rich off of it.
It does not stand up to basic logic that his erroneous theory suddenly becomes right due to an external shock. It's an embarrassing chink in your market position just to see you mention his name...and that's even when you're using him as a contrary indicator.
Prechter is a marketing product built around one single correct call that happened 23 years ago. He's made himself a career and doesn't care about the derision he so rightfully gets because he gets rich off of it.
Me:
[Otto],
1) He wrote it in mid february, well before Japan, which has nothing to do with fundamentals, but after Libya, which does (given that global strife is IMO an inflationary effect)
2) He is continually wrong on gold, as I often point out and really, if he were a hack he'd have gotten aboard by now. He believes what he puts forth, of that I have little doubt.
3) Prechter, as one of the people I learned from, is an important factor in my analysis and has been all along. I differ in some important areas, but the deflation case is vital to the analysis I do (deflation is a play, an intermittent impulse, not a structural thing; it brings opportunity). This component of the analysis would not even exist if I had not digested EWI and let them influence me. I respect the D case, even as I take it a step further and use it to my advantage.
4) The always bullish inflation pitch-people are far worse. 'Stay long, stay strong... own assets'... until one day, a washout comes along, they puke and sell. Then people like me, who awaited the event, buy. Auto pilot long is not the way to go IMO.
5) I rely on nobody, not Prechter, not Hoye, not you, not anybody. I rely on my own honest view of things. Embarrassing or not. Everything else is noise, much of which I consider, but noise none the less because it comes from external sources.
Dig?
Otto:
Dig. But he's an idiot, you're not. You shouldn't allow yourself to be seen in the same room as him.
Me:
[Otto], first of all, LOL.
Second of all, I am telling you he is vital to my analysis (in some ways he might not find pleasing)
Third of all, he scares me and makes sense to me, which is healthy for me because when I pass his test, I am the strongest market player I can be, even as I remain 'inflationista'.
Fourth of all, I lightly promote his services, but always with the caveat that I believe the deflation case comes in events or impulses and should not be married (until the 'final deflation' of course, when the system ends). I do so when I believe the threat of such an impulse is oncoming and measures EWI would suggest would be very sound - temporarily.
Fifth, I could be wrong and Prechter could be right. One thing to be said for him is that he holds the 'contrary' ground and it is hard for me to believe a world full of copper bulls are such geniuses, when it is the bull trade that IMO carries the majority of the dumb asses.
Sixth, don't mess with my system man! This is what works for me and for my service. I want to be aware of what Prechter thinks, along with a host of others. He's the poster (D) boy, and he remains vital to me.
Seventh, I am going to produce this on the blog unless you object.
Otto:
produce away, dude!
Listen, i know you use Prechter as some sort of counterweight. I have my own, but i keep them out of the overt picture. I noticed one thing in your last mail that i didn't comment on, but i will now. You mentioned him as "...one of the people i learned from". Fair enough. But note the past simple tense you chose while writing. As your resident cunning linguist i'd say that the choice of tense, whether subconscious or not, shows that you've moved on from the things Prechter was capable of teaching you. And rightly so because as noted previously, in the end he's an idiot and you're not. So don't drag yourself back down to his level in your public writings!! For sure keep him as part of your own checks'n'balances mechanism, the same way i have certain writers that do the same for me. But harping on about Prechter to your audience does you NO favours whatsoever, because the sophisticated people that read you and get you have long since dismissed the bad theory and stubborn refusal to admit error personified in that fool.
This one is also reprintable on your blog, it's up to you if you use it.
Listen, i know you use Prechter as some sort of counterweight. I have my own, but i keep them out of the overt picture. I noticed one thing in your last mail that i didn't comment on, but i will now. You mentioned him as "...one of the people i learned from". Fair enough. But note the past simple tense you chose while writing. As your resident cunning linguist i'd say that the choice of tense, whether subconscious or not, shows that you've moved on from the things Prechter was capable of teaching you. And rightly so because as noted previously, in the end he's an idiot and you're not. So don't drag yourself back down to his level in your public writings!! For sure keep him as part of your own checks'n'balances mechanism, the same way i have certain writers that do the same for me. But harping on about Prechter to your audience does you NO favours whatsoever, because the sophisticated people that read you and get you have long since dismissed the bad theory and stubborn refusal to admit error personified in that fool.
This one is also reprintable on your blog, it's up to you if you use it.
Me:
Thank you. I'll include all.
Just be careful how strongly you call him a fool Mark. This is the markets and none of us has THE answer. Prechter remains in my toolbox and I will continue to reference him (and promote him) because I do not hold the view you do. Again, I think I am the best that I know of with macro technical stuff, or at least I am more comfortable with my own process - as long as we are betraying things that we do not speak publicly. And not messing with my formula means keeping things as they are. I have continually been the first to highlight oncoming 'd Boy' events, and highlighting big daddy d Boy each time. Then the door opens with Denninger, Mish, Panzner, etc. to have their day. It's all part of the stew my man. No one size fits all.
Last word to Otto:
He's smart at marketing. The rest? Fool, fool and thrice fool in the loudest voice you care to imagine.
