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Transcript of an interview with Felix Zulauf
Asked about recent learning experiences, Felix expresses his opinion about the current market and its precedents:
One was in the US — that was in 1938 — that rally had the same characteristics in terms of fundamentals and in terms of technicals. And the other case was in Japan in 1995, ‘96. Both rallies lasted one full year. Both rallies were eventually fully retraced and that’s what I think will happen here too.
Certainly the sideway movement this year suggests that he might be right.
(In the stock markets) we have gone from four times book value to about 1.2 times book value. We will probably go under book value. In the US, book value is 500 in the S&P. (cf 1095 this morning) Usually, secular bear markets end slightly below book value, so there is still some way to go.

(So that sounds like you think we’ll break the March 2009 lows.)

I think we’ll see it again in the next 2 years, yes.
 

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You can get an opinion for every bias. Nobody knows what is going to happen. I ignore the ones that don't agree with my book.
I welcome all opinions, especially those that are not drinking the Koolaid, because those are unpopular!
 

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The most popular word in financial news reporting these days has to be "unexpectedly".

Unemployment rose "unexpectedly". Consumer confidence fell "unexpectedly".

The "experts" seem surprised by every new bit of data that comes out.

The "facts" are all there, and they aren't good, but people seem to be blissfully ignorant of them.

What I worry about is that people like Peter Schiff, who predicted that the stimulus spending wouldn't work because it didn't fix the systemic problems of the economy, also said that the government delays correcting the problem would only make it a lot worse when it hit.

I am not sure what "a lot worse" actually means to the average person, but I have a feeling it isn't going to be much fun for a lot of people.
 

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I read Rosenberg again in the G&M today. Doom and gloom! A broken clock is right twice a day. I chose to believe things are not that bad and will slowly get better. But like the rest of us I really don't know what will happen.
 
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