Last October the widely respected founder and Chairman of Omega Advisors, Mr. Leon Cooperman, saw signs of a bottom in the markets. The Dow was around 9,200 that day and the S&P was just below 1,000 points.
After reading his comments and based on my own informal research I sent Mr. Cooperman a letter and a copy of my book, “Final Audit.” I issued Mr. Cooperman a challenge, a friendly one, stating that the market would continue to tumble and that we would be lucky if it bottomed near 7,000 on the Dow and 740 on the S&P.
We know what happened in March.
I like Leon Cooperman. I listen carefully to what he has to say whenever he is a guest on Squawk Box and I manage to get up early enough to see him. This is in no way derogatory toward him. Bringing up my letter of October 2008 is really a challenge to those analysts with whom I currently disagree; many of whom did not see the the decline to the March 9th low coming.
At what point is analysis converted to punditry? Is it the time between the desk and the camera? Do analysts really believe the optimistic statements and numbers they present or is their on-screen analysis pulled out of their proverbial asses for the sake of a rising market at the peril of investors?
As I’ve stated in recent writings, we are headed for an unprecedented fall, “The Dow at 6,000,” because the things we are faced with do not follow the usual fundamentals, patterns, or charts, “September, the Beginning of the Fall.” We have experienced far too many largest ever, highest since, record numbers, historical levels, to not understand that something more is destined to happen before we recover.
If I were a betting man, and I am, I would bet that at some point the convergence of several of these unprecedented factors, at the same time or in succession, will be devastating to the market and the economy.
The ONLY thing or time we can point to that demonstrates the same similarities is ‘The Great Depression.” Read the rest of this entry »