Institutional Advisors Kudos and Q&A

Kudos

• July 2011 from F.D. in Belgium

Thank you Ross, amazing analysis. Really appreciate your input at Howestreet. Nice to know there are still honest people out there like yourself and Bob Hoye warning ordinary people like us for the danger of credit speculation. If it was not for you guys we would be completely brainwashed by the mainstream media. Thank you and good luck. PS If you see Bob say "thank you" to him too. I'm a big fan of both of you. You guys have my deepest respect.

• April 2009 from N.S. in New Zealand 

'Global Warmongers' is a gem. Brilliant stuff. Mostly data I was broadly aware of, but nice to have it presented lucidly, authoritatively and succinctly. 

• 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.

I would like to thank Bob and the rest of the team at Institutional Advisors for their outstanding market analysis. Through an approach based on in depth financial history coupled with market timing skills, they have predicted the path of events that have unfolded in the current global Credit Crisis with great accuracy. All great newsletters open their subscribers’ eyes to be able to make the correct informed decisions. I am grateful for having the opportunity to learn and profit from their knowledge.

• November 2008 from B.R. in the U.S. (subscriber since October 2007)

I have very much appreciated your advice these past few months. My retirement assets have remained intact. My only losses have been when I have "fallen of the [your] wagon" and gone off on my own impulses... the reports on the general equities market and the energy and gold sectors have saved and made me money. Thank you!

• November 2008 from S.S. in China (subscriber since April, 2006)

The Best Analysts ~ The best financial market analysts. Very few analysts anticipated the financial-market events of the past year. Some were bullish on the stock market over much of the time, or thought that the stock market was experiencing nothing more than an intermediate-term correction within a primary bull market. Others, like us, were bearish on the stock market, bearish about the intermediate-term prospects of industrial commodities and generally bullish on the US$ relative to the euro, but thought that the market action would be far less dramatic than it proved to be and that some stock-market sectors -- most notably the gold sector -- would provide good returns. And then there were those who correctly anticipated a market debacle, but thought that both gold bullion and the gold sector of the stock market would rocket upward in response to the crisis.

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)

Bob: Now that I’ve been a subscriber/client to Institutional Advisors for three years I thought it appropriate to provide a little feedback from a non-institutional client. My appreciation/learning is as follows:

1. 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.)
   
   
2. 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.
   
   
3. 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)

I would appreciate if you could somehow extend to Mr. Hoye my highest respects not just for his analysis but also for his outstandingly witty style which makes me chuckle joyfully every week, even as a German mother-tongue speaker. It would be great if he were to write a book one day to bring all of this closer to a broader public too. Thank you!

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Q&A

• JAN 11/09 from H.O. in Tirol Italy 
  

In your reports the bull market top is presumed to be in 2008. What if the top was already in 2000? Would the situation be today, like the situation in 1937/38? 

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 
  

What is your opinion on the deflation / inflation debate? 

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 
  

Have the markets capitulated? 

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.