Institutional Advisors Kudos and Q&A
- July 2011 from F.D. in Belgium
- April 2009 from N.S. in New Zealand
- November 2008 from S.R. Hedge Fund Manager in the U.K. (subscriber since June 2007) As of Oct 31/08 their Macro Fund is up 51.27% year to date.
- November 2008 from B.R. in the U.S. (subscriber since October 2007)
- November 2008 from S.S. in China (subscriber since April, 2006)
There are undoubtedly others who got it right, but of the analysts we know of, the only one who was generally right about how the crisis would impact ALL the major markets (the stock, gold, currency, bond and commodity markets) was Bob Hoye of Institutional Advisors. Bob's service is designed for institutional money managers (as the name suggests), but it could also be of interest and benefit to serious retail investors.
- November, 2008 from J.D. in Canada (subscriber since November 2005)
- There are two aspects of an ‘advisory’ service that determine its value: one is its quality, and the other its applicability. With regard to the former, I have yet to find a stock advisory service that is better than tossing darts at the page, so for the most part I use ETF.s to go long or short. And relative to the latter, there are certain items about an individual – his interests, his emotional control – that he cannot and perhaps should not change. For example a good service that provides daily charts on technical trading setups with a high probability of being right for the next several days are counterproductive for me, contaminating my mental space with blips of little interest. (I subscribed for a year on the hope that it would help me execute better when I do make a trade.)
- You are a student of the markets. But what comes through time and again is your use of the markets to study the state of the human condition and where it’s going. And from there you go back to insert us – and pretty damn correctly – into the market cycle, or cycles, unfolding at the time. There is nothing different this time’ about human nature, about crowds, about the press, and thus about the markets. So history and a few proprietary signals are your tools. All of which begs the questions: if it’s all there in history why are there not enough plain souls gaming it to render it truly different this time? Why are historians not generally rich? I suspect your answers would be similar to those for the answers to the questions of why do we still fight wars or argue with our spouses.
- Yours is an advisory service certainly, but it is also an education service. In my experience it’s one thing to read about the Austrian School of Economics; it’s quite another to see the principles applied to the real world in real time. Of course this past year Nature has provided you with an excellent laboratory in which to demonstrate those truths.
From personal experience, and now reinforced by your service, I’ve come to a couple conclusions about investing success – for me at least. The first is that if one’s primary interest in the markets is to make money, then one probably won’t. One’s emotions go first and the rest is, well, uphill. The second is that if one has trained one’s mind in institutional skills, where one is constantly dressing for his appraisal, then he will be playing with half a deck in the investment business – where one should be constantly examining his many mistakes and downright foolishnesses. For that reason alone when I get well into my seventies and would otherwise like to hand it over to someone else, I’ll have trouble giving it to a ‘Private Client Service’ in a large bank, where the decision from an all-day strategy meeting would be to reduce equity exposure from 60% to 56%.
An aside: I accept that mankind is prone to tangents and through history often times rather costly ones that divert resources into useless endeavors – eg the Bush Administration’s corn-based-ethanol program. (Would we have done any worse had we just drunk the stuff?) And yes, the present global warming may well be in part the result of Nature’s cycles down through the millennia. But mankind has also been a prolific species and does throw a lot of the warming gases into the air. In geologic history there may be nothing different this time. However in mankind’s history? But that’s strictly an aside.
I have just renewed my subscription. I know it doesn’t sound good this year, but the cheque is in the mail. Again, your service is thoroughly appreciated, Bob.
- October, 2008 from D.K. in Switzerland (subscriber since May, 2004)
- JAN 11/09 from H.O. in Tirol Italy
Bob Responds: We thought that a cyclical bull market was possible, within a secular bear. Looking at the Naz this is the case. However, for what ever reasons, the late bull market included both financial and tangible assets. Big action in the latter was missing in 2000 and obvious in 2007-2008. This made the late part of the bull look like 1937 and the five-year run lined up. It also looked like 1929, or 1873 and as it turned out the crash matched those rather well. So, if the rebound makes it to around April that would confirm that we are in a post-1929, or 1873 depression.
- JAN 7/09 from J.E. in Vancouver BC
Bob Responds: The article “Commodities and Politics” explains commodity bubbles and contractions. "...it is worth noting that throughout all, repeat all, of financial history, prosperity has been associated with rising commodity prices and hard times with declining commodity prices."
- NOV 11/08 from N.J. in London UK
Bob Responds: Our strategy on our dramatic market reversal was to use the rather methodical nature of previous transitions from a great financial mania to an equivalent contraction. This enabled the anticipation of the fateful reversal in the yield curve in May 2007, which had changed enough by that July to conclude that “The greatest train wreck in the history of credit”, was on. Our Capitulation Model has registered that condition on the Dow, with the only previous readings occurring in 1996 and three times in the 1929 to 1932 bear. We are now getting a similar reading on the CRB commodities index. Following a “Capitulation” the low is usually in within a two or three weeks, which allows time to implement policy change. At the other end of great moves the model kicks in with Upside Exhaustions”, just as dispassionately.