Institutional Advisors Archive 2002-2005
"Pivotal Events" DEC 19th 2003 "As with rounding tops in real time, the process seems to take a long time."
"Euro/Yen on Track" DEC 1st 2003 - The Euro/Yen cross rate has successfully tested and reversed from the 125 to 122 support (as outlined in the October 8 study).
"Euro/Yen a Long-Term Base on the Verge of Completion" OCT 9th 2003 - The Structure Is The Message. Technically, the bear market in the Euro/Yen from 1979 completed at the end of 2000. The structure of the decline and subsequent rally is one we have witnessed numerous times in the past.
"Independents Day" "INDEPENDENT RESEARCH and the FOUNDATIONS OF MODERN FINANCE" Bob Hoye's presentation to Fund Managers OCT 8th 2003 in Toronto
"The Golden Triangle" 3Q 2003 GOLD A "symmetrical triangle" is in the midst of being formed.
MARKET STORIES JUN 12th 2003 The Witch of Wall Street and Deliberately Lunatic Business Trips. "Hetty Green, she was the world's richest woman and the shrewdest female who ever invested a dollar." AND "The market never accommodates the desires of the crowd." or "The mooches are not allowed to make money.".
"Inflation, Disinflation and Deflation" JUN 4th 2003 - There are far too many inadequate impressions about deflation going around.
2Q 2003 GOLD (MAR 31st & JUN 20th 2003 & 2Q 2003 Update) - The Demand Index is generating bullish divergences on most golds. April should be an up month for golds.
"TOP OF THE MANIA – THIRD ANNIVERSARY" MAR 6th 2003 - One of the most fascinating things about the financial markets occurs shortly after a significant trend reversal. No matter how shocking, embarrassing, dislocating, or costly the reversal is, within two weeks there is no one who didn't make the correct call.
"We Initiate Coverage of GDP With a 'Sell'" JAN 30th 2003 - GDP has no board lot and can't be traded. Moreover, it has negligible predictive value in positioning things that do trade. Occasionally, when something instructive comes along, it prompts a comment.
"Financial Bubbles & War" JAN 23rd & MAR 10th, 2003 - It has been popular to look at the outstanding stock market that followed the last Gulf conflict and assume that the next one will prompt another bull market. This seems to be inadequately researched.
"Is It Up When It Should Be?" 2002 HIGHLIGHTS - Yes, our January 4 edition expected the high for the year around March. This would be after a correction until late January.
"Princely Finance and Taxation" DEC 30th 2002 - One would have hoped that financial rip-offs committed by medieval princes would have been permanently shelved when liberal enlightenment ended the divine right of kings.
"Expect Better Than Expected"
Financial Post OCT 18th 2002 William Hanley quotes Bob Hoye.
"Real Men Trade the Long Bond" OCT 15th 2002 - In 1779, Samuel Johnson observed: "Claret is the liquor for boys; port is for men; but he who aspires to be a hero must drink brandy." These days, heroism is found in martinis and the long bond.
GOING INTO THE BOTTOM OCT 2002 (October & September Pivotal Events) - Outlook For 2003: The point to be made is that, while the stock market has been as bad as it was from 1929 to late 1931, the economy is not in the same category.
"Bullish Forever" OCT 10th 2002 - The following piece documents the remarkably similar reasons why the bull markets of 1929 and 2000 were unique and should run forever. Despite this reasoning and with remarkable fidelity, they both lasted for 116 months. That's from the top of the last business cycle with the old era of inflation to the euphoric climax of speculation.
"Speculation is Fungible" OCT 4th 2002 - Speculative action is fungible. Whether in stocks, bonds, or commodities, excess has similar and measurable characteristics as does its consequent unwinding of suddenly and chronically unsupportable positions.
"Efficient Markets Part II" JUL 15th 2002 - Modern markets are impressive. In late 1999-early 2000, the surge in demand for speculative stocks was without precedent. Then, with a fabulous thrust of investment banking, Wall Street rose to the occasion and satisfied a demand that was thought to be insatiable.
GOING INTO THE LOW June-July 2002
July 24 ChartWorks, July 23 ChartWorks, July 17 ChartWorks, July 15 Institutional Advisors, July 12 Pivotal Events and June 5 ChartWorks
1Q & 2Q 2002 GOLD (+Sept 2000 Gold Intro) September 2000, May & June 2002 - Our study of June 15 observed "An extended recovery in gold's deflated price requires more distress in the credit markets, a definite downtrend in base metal prices as well as in other commodities, and breakdown in the senior stock indexes. This could begin in September."
"Base Metal Prices 2000-2005" 1Q 2002 - Using copper as a proxy, base metal prices have increased to an important high with the dramatic conclusion of each new financial era, from which a very long bear market followed. We identified the top for what it was in 1Q2000 and summed it up in our May 23, 2000 special study. Then, when our index was 696, our initial target was 375. As this adequately described the most likely course of events, the original is attached.
"General Electric 2000 to ??" MAR 25th 2002 - Once the top was completed in March, 2000, the stock market was likely to correct until May (Yes). A recovery was expected into early September, 2000 when the next slide would formalize the bear market. Our models have been based upon the dramatic climax of five previous new financial eras and include credit spreads, the yield curve, and industrial commodity prices.
"Top of the Mania - 2nd Anniversary" MAR 12th 2002 - One of the most fascinating things about the financial markets occurs shortly after a significant trend reversal. No matter how shocking, embarrassing, dislocating, or costly the reversal is, within two weeks there is no one who didn't make the correct call.
"Junior Golds Could Shine" Toronto Star OCT 28th 2005 Dianne Maley reporting on Bob Hoye's analysis of the rising 'Real' price of gold.
"PIVOTAL EVENTS" OCT 13th 2005 - "Essentially, there are two main classes of speculator. There are individuals who voluntarily choose to speculate and policymakers who seem compelled to tout highly speculative theories and practices. Regrettably, the latter never strays too far from using currency depreciation as a poultice for any real or perceived problem."
"PIVOTAL EVENTS" AUG 25th 2005 - "As has been widely celebrated, there is a global boom in both financial and tangible assets. When was the last one and the one before that?"
"PIVOTAL EVENTS" AUG 18th 2005 - "Of course, this gets us into weighty discussions of ultimate, penultimate, and post-penultimate tops."
"PIVOTAL EVENTS" AUG 11th 2005 - "...one of the driving components of the stock market (oil stocks) is reaching a full-blown mania."
"PIVOTAL EVENTS" AUG 4th 2005 - "The hot action in stocks and industrial commodities now seems eligible for a brief correction."
"PEAK CREDIT?" JUL 13th 2005 - "Credit forces trump great speculative visions - every time."
"CHARTWORKS Uraniums" JUL 7th 2005 -Cameco (CCO.TO), Denison (DEN.TO), International Uranium Corp (IUC.TO), UEX Corp (UEX.TO)
"CHARTWORKS Dollar Index" JUL 6th 2005 - APPROACHING PRICE AND TIME TARGETS
"GOLD EXPLORATION STUDY" JUN 15th 2005 - THE CONTRA-CYCLICAL BULL MARKET IS STARTING
"CHARTWORKS XAU & HUI POISED FOR A RALLY" MAY 27th 2005
"CHARTWORKS COPPER ENDING WEAK SEASONAL PERIOD" MAY 18th 2005 - "Base Metal Stocks Poised For A Good Rally"
"CHARTWORKS U.S. Dollar Index" MAY 9th 2005 - "Time For Consolidation To Make Way For An Extended Move"
"REAL MEN TRADE THE LONG BOND" MAY 12th 2005 - "The U.S. Treasury intends to resume issuing long-dated treasuries."
"GOLD CONTRA - CYCLICAL OPPORTUNITY?" APR 27th 2005 - "According to thorough technical analysis, the gold sector seems to be approaching a significant low. This is complete with measurable signs of capitulation selling and rather bearish sentiment."
"SPECULATIVE BLOWOUTS COMMODITIES NOW" MAR 23rd 2005 - "The action in commodities has become an irresistible bubble. This enjoys similar convictions to those fully expressed in the tech mania that blew out in 1Q 2000. It also shows remarkable comparisons with the huge boom in commodities that climaxed in 1980." See also "BUSINESS BANKRUPTCIES CHART" MAR 23rd 2005
Big Change in Energy & Credit Markets
"Energies Are Getting Too Frothy" CHARTWORKS MAR 8th 2005
"Fifth Anniversary of Tech Bubble Climax" PIVOTAL EVENTS MAR 10th 2005
"Interest Rate Markets A Profound Change" CHARTWORKS MAR 15th 2005
"Why You Should Own Gold & Dollars" FEB 10th 2005 Jay Taylor interview of Bob Hoye
"GOLDS THE 'RULES' FOR AN INTERMEDIATE LOW" JAN 21st 2005
BANKS & FINANCIALS "ALERT" JAN 14th 2005 - The December 2/04 edition of Pivotal Events noted that the steady uptrend in our Bank Trading Guide had taken on some upside volatility and, as in 1998, this could be the precursor to a reversal.
"BANK WEIGHTINGS" PDF JAN 13th 2005 - Our proprietary Bank Trading Guide, which had been in a steady uptrend since June, 2003, steepened its climb in setting what turned out to be the high on December 1, 2004.
"POLITICAL GLOSSARY" JAN 11th 2005 - Every field has its own special words and expressions which others find hard to understand. Politics is no exception. For those who have difficulty understanding the strange way words are used by politicians and the media, here is a glossary translating political rhetoric into plain English.
"BONDWORKS 2004 Track Record" Summary: 11 Winners; 1 Loser Levente Mady JAN 23rd 2005
"A RALLY FOR THE BUCK?" Barron's Interview DEC 20th 2004 Sandra Ward's interview of Bob Hoye and Ross Clark.
"Pivotal Events" DEC 16th 2004 ...throughout most of recorded financial history, prosperity has been associated with rising prices and hard times with falling prices.
"Pivotal Events" DEC 9th 2004 - Character Of The Markets: Normally we start with the stock market, but it is only one element in a speculative blowoff. As with the example in 1Q 2000, the orthodoxy of tracking management, earnings, and Fed utterances may be inadequate to anticipate rapid changes in market forces. The Fed and corporate management will lag the change.
"ChartWorks Stock Market Track Record"
(AUG 2002 to DEC 2004) DEC 7th 2004 - The following pages document the timely and reliable studies done by Ross Clark under the ChartWorks banner. Going into important market changes, we use technical and fundamental analysis. This covers equities and a similar approach to interest rates and metal markets has been employed. In a world of increasing financial volatility, this "belt and suspenders" approach has added value to policy determination as well as tactics for trading.
"Pivotal Events" DEC 2nd 2004 - Market Characteristics: Our theme since August has been that all, or at least most, of the hot games would take a run at the speculative spikes set earlier in the year. While we are, by our sober nature, chary of hot speculations they are particularly welcome when they have been anticipated.
"Election Post Mortem" NOV 4th 2004 - As the saying goes, the Democrats piqued too early. Beyond this, the world's antagonism, in some cases outright hatred, for George Bush in a rather startling fashion ostensibly created a powerful union. Liberals have united in a nihilistic fashion!
"POLITICAL AND MONETARY REFORM" OCT 28th 2004 - An Address to the Fall Dinner Meeting of the Committee For Monetary Research & Education in NYC - Financial history and libraries are never as dull as they may seem. In my experience a couple of decades ago, it was like prospecting for gold, but within the relative comfort of dusty library stacks. The discoveries ranged from Eureka! to the vignettes of life.
"Pivotal Events" OCT 21st 2004 - Big Action: Since early August, our theme has been that the action was building towards a big test of the speculative spikes set earlier in the year. We have been illustrating this in a table and this is how this week's update looks.
"Central Banking, Itself, is a Speculation" OCT 15th 2004 - "The Federal Reserve Act does not … contemplate the use of the Federal Reserve System for the creation or extension of speculative credit." Public Announcement by the Fed on February 2, 1929
"ChartWorks THE MANIA IS OVER" OCT 12th 2004 - "Copper Price Into Time and Price Resistance"
"Pivotal Events" SEP 23rd 2004 - "Too much prosperity makes men greedy and desires are never controlled sufficiently to stop at the point of attainment." Seneca (4 BC-AD 65)
"Oil Shocku" AUG 31st 2004 - The following pages outline our strategy and tactics on what was thought to be the potential for a cyclical high in crude oil prices. Coming out of the stock and lower grade bond panic of October, 2002, a cyclical bull market and a cyclical recovery for business was possible.
"Credit Spreads" MAY 10th 2004 - Some are again discussing the peculiar confluence of forces that are mounting for another "Perfect Storm". Earlier in the year, we argued that in highly volatile financial markets the Perfect Storm includes both the speculative spike up and the consequent spike down as suddenly unsupportable positions suffer forced liquidation. Nothing peculiar at all.
"Pending Bear Market for Central Planning" MAY 3rd 2004 - The most well known feature of independent research is the impartiality derived by not being an underwriter or a stock broker. Less well known is the freedom to be independent of the orthodoxy of interventionist economics. There are basically two interesting reviews that anybody can do. One is the history of economics, which is essentially the history of ideas. The other is to impartially review financial history and observe the recurring patterns of significant events. There is only one financial history and, despite this, there are a myriad of ideas about it.
"Baltic Freight Rate and Other Speculations" APR 14th 2004 - As noted in Thursday's Pivotal Events, the Baltic experienced a fabulous speculation similar to any of the great ones since 1720. The following page of charts compares the BDIY action (top chart) with gold (1980) and the Nasdaq (2000).
"How a Sound Currency Can Fight the Fed" MAR 31st 2004 - Our technical advisory, The ChartWorks, ably called the low on the dollar at 84.5 in January and its recovery. Technically, this move could reach around 94. Let's call this the short term and quickly move to the longer term, which could be a lengthy recovery in the US $. At a time when the Fed has promised and threatened to depreciate the currency and when everyone knows that China is going to buy commodities forever, the call for a strong dollar may be unacceptable.
"Pending Bear Market for Many Classes of Bonds" MAR 4th 2004 - "Junk Has Enjoyed The Mother Of All Rallies". Perspective: At the moment, the best of all worlds exists for stocks, bonds, industrial commodities, and credit spreads. Since the 1991 contraction, the markets have seen considerable abuse of the credit and currency markets, otherwise celebrated as a "New Financial Era". As they occurred in the world's financial capital (now New York; previously London), they were followed by a long-lasting revulsion for debt and associated credit contraction.
"Coups Financial" FEB 13th 2004 - During the 1920s' financial mania, the "Fed" and Ben Strong were synonymous, much as today the Fed is Alan Greenspan. Apprehensive of a slight weakening of business in 1927, Strong lowered the discount rate from 4% to 3 ½% and described it as giving a "coup de whiskey" to the stock market. On Wednesday, Greenspan, in keeping with the times, gave a "coup de martini" to the markets.