College Station Debate

Tomorrow and Thursday are key if the markets don't head to new highs. At this point it doesn't seem like much is holding them back (some indexs have made them) but it also may just be an all in by the market. A buying exhaustion if you will. I don't know. Despite decidedly weaker numbers in January, the February numbers coming in are all being explained away by snow as they are weaker still. Somehow even areas of the country where snow was not a factor where supposedly weak because of snow hundreds of miles away. Go figure. Market are very overbought but have been for over a week now so that doesn't mean anything. I mentioned weeks ago the biggest danger for the bears was this was like September of 2007 when the banks started crumbling but caught themselves and set new highs in November of 2007. How the market is able to do that when evidence is glaring to the contrary is beyond me. At the time I put that at a pretty low probability. Either that probability was hit or my probabilities were wrong and it was more likely than I gave it credit for.

Tonight I will be in College Station debating with a good friend of mine who works at another investing firm. We will be doing a formal debate for the Aggie Investment Club at the business school with the resolution as follows:

"Due to systemic forces in the system, bottom up stock analysis has become essentially meaningless to generate alpha for the foreseeable future outside of select special situations. A bleak economic outlook driven by systemic forces will ensure equity returns will be negative over the next 12 to 24 months."

It should be really interesting. Look forward to seeing some of you there.