Monday, June 20, 2005

Stocks R Us

In one of my rare moments of sound on CNBC today, I was rewarded with an extended discussion about how to buy real estate in Spain. No kidding. This is what the US equity market and it's chief media exponent has come to, buying real estate in Spain. Note to Bob Prechter, this is NOT a top.

Bob Prechter for those who are too young to remember the markets of the 80s and 90s, is a market analyst turned social scientist who was mainly responsible for the popularization of the Elliott Wave Theory of technical analysis, a pattern recognition technique that has the remarkable attribute of never being wrong, because there always is an "alternate count" that amazingly and exactly correlates with the market's twists and turns......In retrospect. Prechter became famous being a bull in the eighties and a bear ever since. Or a bear ever since he recommended to his subscribers to, "Go Long" on the Friday before the crash of October 19, 1987. But enough of that, other then I was a faithful subscriber of Prechter's, circa 1984 through 1988.

So what I am trying to reconcile here is where the US stock market is headed, when the dominant stock TV coverage is obsessed with real estate in Spain, and Las Vegas, and Miami and Omaha. Where once commercial time on CNBC was filled with truck drivers striking it rich on Silicon Valley IPO's, now we are entertained with cute ads touting on-line poker. When it served his dire paradigm, Prechter labeled such cultural trends as indicative of a change from bull to bear markets. If there is a scentila prescience in such insights, based on what our talking suits and low cut blouses are filling the airwaves with these days, back up the truck, we're going to have one heck of a summer rally. You see once the real estate boom becomes fodder for banality, the flow of financial speculation will once again turn to our time honored American tradition of Google and Company.

Just in case though, a Spanish dictionary may not be a bad idea.

5 comments:

David M Gordon / The Deipnosophist said...

"... a pattern recognition technique that has the remarkable attribute of never being wrong, because there always is an "alternate count" that amazingly and exactly correlates with the market's twists and turns."

Allan,

Your wit inspired for this reader a good chuckle this morning; thank you.

BTW, Spain provided the third best global real estate market in Q1 2005, behind only South Africa and Hong Kong. And was among the top high fliers around the globe during the past 8 years. Is that the Hunchback reaching for the cord...?

Allan said...

David, I checked, there are only 33 Starbucks in the entire country, 12 in Barcelona, 19 in Madrid and 2 in Seville. I like the bet on Starbuck's international growth a bit better then a Spanish villa or condo right now. But that's just me.

A

Anonymous said...

David,

Glad you were able to check out the CNBC Squawk Box Blog Site...

Keep chekcing back and feel free to add our site as a link..if you feel up to it!

www.squawkblog.com

MG
Squawk Blog Editor

David M Gordon / The Deipnosophist said...

Hi again, Allan,

I fear my earlier comment sowed confusion...

Based on the rate of change of real estate in Spain over the past many years and its ranking at or near the top of the heap each of those years, I too would 'stand aside'. Of course, if the US$ were to return to its high against the Euro of three years ago I might reconsider... but then there are other areas of Europe I would prefer living in than Spain, including Barcelona and Seville (despite their charm).

Rafitax said...

Hello...from Madrid.

The pace of growth of prices in real estate can't stand in this rates for a long time...

I hope...



Rafitax.