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Tech Passes "Sell By" Date

Daily Rap 04-19-2013

Overnight markets were pretty much a nonevent, although I would have expected with earnings season having been so poor, and the world economy so weak that even IBM was unable to pull enough levers to make the earnings estimate, that the tape would have been under a lot of pressure today. The technology sector has been just horrendous, as IBM, SAP, Oracle, Accenture, and Infosys -- which encompass a very broad spectrum of world GDP -- have all had real problems. Almost everyone else has stumbled as well, with Microsoft one of the lone exceptions, where perhaps expectations were low enough that its numbers were not a problem, even though they were not great. After all, the company does have important new products that are rolling out, albeit...more

Last year's posts for Ask Fleck

Q: Hate mail? Because I called you out for playing monday morning qb? Get real. I've been reading you for 10+ yrs now and have never written one critical thing. And now because I thought your Rap on monday was awful, you label my writing as hate mail. That is pathetic. Will gold bounce from here? I am sure it is about as oversold as an asset can be. In fact I too am looking for a spot to get long it.

And to be clear I had no position in gold all last week so I didn't lose or make money off of this historic move lower. As per your response I didn't DEMAND that you tell me what you were doing so that I could trade on it. I don't trade based on what you do. But for you to talk Monday that you were "convinced that we were in store for multi-day carnage, not unlike the 1987 stock market crash" (these are YOUR words, not mine so don't tell me i am not reading your stuff carefully!) and that you came to this conclusion Friday MORNING as per your response today, for you not to have posted something Friday or tweeted is incomprehensible given how bullish you've been.

Even if the post was not actionable as you suggest, given that most of your readers have gotten crushed the past few weeks with their gold long positions, it is extremely annoying to find out on monday night after the biggest crash in gold in 40 yrs that Mr. Gold Fleckenstein himself sold some of his gold position Friday morning because he was worried about a "multi-day carnage, not unlike the 1987 stock market crash" (your words again) and yet never posted that he SOLD gold on Friday!! And I don't even have a gold position! I can't believe I am the only person on your website who is annoyed by this. Question for you...Friday morning you sold gold futures I presume...this is the first time in how long that you actually sold gold futures?

Fleck: There is so much to quarrel with in your rant, but I will try to stick with what may be useful to other people. How is it Monday morning quarterbacking, when I am telling you what I thought and did? I am not saying, "Gee, I should have done this or that." The problem with announcing real-time actions is that I can easily be WRONG. I make lots of trades that I do and then undo all the time (which is why I will never use Twitter to disclose them). And I try to only make declarative pronouncements when I have a lot of confidence that I may be right (even though I never know for sure, and am often wrong).

I try very hard not to whipsaw folks. The same was true when I was short and fighting the bubbles. I used to have to cover names I hated all the time to manage my risk. But none of that risk management tinkering changed my opinion of the ultimate outcome. In this SPECIFIC case, after I did what I did, the day got worse and worse, and my decision was appropriate, but what if I alerted everyone as to my actions and then the day had turned around, and I had to undo what I had done (that has happened to me often)? Would I then re-tweet that it was a false alarm?

Most importantly, whatever trading I do is a function of EXPOSURE. I have a lot of metal exposure, and it is necessary that I trade to manage MY risk. If one has a small position, they have NO need to do any of that, and that is why I don't tend to get too specific about tactical decisions I make, because they are only right for my positions. Everyone else has a different level of exposure.

The whole topic is quite complex, i.e., turn the situation around. What if I had said "I'm buying aggressively" -- and was wrong, and people followed that advice? (Fortunately, during this decline, I have repeatedly suggested that folks not average down blindly.) It isn't easy trying to find the right level of information to divulge. I often wait until I am more certain, and this was such an example, though a rather extreme one.

As for my 1987 reference, it was regarding the Friday-Tuesday multi-day culmination, NOT the amplitude of the crash (thus I wasn't expecting the biggest move in "40 years" as you seem to conclude I was.) Finally, YOU are the one who is Monday morning quarterbacking ME and you have a lot of nerve getting in my face when you have no position at all, nor any concept of how tricky it is to disseminate your views without doing more harm than good.
(posted: 4/18/2013)

Q: Bill,

Read your book a couple times and just recently became a subscriber. Your raps make working a frustrating job while the masses cluelessly pound gold down more tolerable!

This was irritating to read when I came across it browsing earlier:

Gold Mining Stocks Still In Free Fall As Gold Price Stabilizes

So, gold goes down because there's no inflation...yet that nonexistent inflation, which is bullish for gold, has driven up the costs for companies that mine it so don't buy their shares.

Heads the gold bear wins, tails the gold bull loses.

Fleck: Really well stated by you. The mainstream press want it all ways.
(posted: 4/18/2013)

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