Gloom And More Gloom

One of the most productive half hours of stock market television is the first 30 minutes of CNBC Asia's Squawk Box on Sunday afternoon. Typically they have one portfolio manager or strategist on for most of the time and they really pick apart the US markets and the things that influence them. What is unique is that they get to a depth of analysis that no other network explores. They have a pool of about five or six people for this segment that they choose from to bring on and all of them work from Asia.

This week's guest was Stephen Gollop who is head of Hong Kong based Bridgewater, which is an investment advisory firm. He has been wildly bearish on all aspects of US assets for ages and very bullish on gold for ages. He has been spot on with the gold call and, uh, well a little early on the demise of US capital markets.

The reason that I am posting this is that his position on the US markets is not unique among foreign money managers. Mr. Gollop has come on CNBC repeatedly laid out the same general thesis and thus far has been wrong. He lays out a clear concise explanation of why he feels the way he does and it sounds plausible. I don't know enough about him to know how smart he is. The point is to not get too caught up in this rhetoric. A key component to moderately successful navigation of capital markets is some sort of exit strategy, some point at which you get defensive in your portfolio. When and how you do this probably isn't the most important thing just that you take some action when you say you are going to.

I am doubtful that the US stock market is poised for some hideous decline. The S+P 500 is more than 20% lower than where it was four years ago. The Nasdaq is about 60% lower than where it was four and half years ago. This isn't to say the market can't go down 10% or 15% from here or I could be very wrong and we do have a hideous decline, but if you read this blog you know I have a clear simple exit strategy.

Lastly, Bill McClaren thinks today is a pivotal reversal day for the Australian and that it will drop 10% over the next three or four months. If he is right, most about New Zealand will be wrong before it is right. I still think the long term theme is positive for both countries.