capitulation or not? and Dr. Doom - true to his moniker.

No charts today. Only Rants.

We are getting close to our possible (mini ?) turndate on Mar 11th (+/-).

I would advise shorts to be extremely careful. There is just way too much negative sentiment and the D-word is being used without care. 

We see that there is lot of talk of the coming capitulation on message boards to mark a bottom - well do we capitulate a second time? While anything is possible , it is key to note we already had the big capitulation in 2008. 

More importantly, we are nearing a strong rally phase in all the indices very soon. We would rather bet on the coming rally than the capitulation and try and time every penny out of the market. So many names are attractively priced for a 50-100% move. We are also beginning to see some odds of a 1000+ pt rally in the next week or so. We would rather catch that than the capitulation bottom.

As an aside: For those who watched  Dr. Doom (aka Nouriel Roubini) today on CNBC - We are appalled by his ability to connect the dots sometimes and really wonder if he is really worth the salt as an university professor and economist. We simply cannot get over his government interference policy to save America talk. He has correctly ascribed the problem to excess liquidity, but fails to take the argument to its origin  - who created the excess liquidity in the first place - the government. Why should they be relied on to fix this mess? Similarly his logic that - no one wants to buy, if things are cheaper tomorrow. If this was the case, then conversely,  why would anyone sell when there is inflation and everyone knows prices are going to go much higher? In our opinion, this is totally against econ 101, there is a price where buyers will step in, similarly there is a price when sellers will step in. To say things will spiral back to the neanderthal age, if left alone is just as nonsensical, as saying in a growing environment, we will just keep growing unchecked. 

Remember, cheap resources are good for companies with strong balance sheets. The companies who are sitting on massive cash will eagerly lap up these resources when they become attractive. These are the companies which will be lean and mean enough (due to the cheap resources) and likely emerge the leaders of tomorrow. In short, this recession is a blessing for the sector leaders. All the dumb companies, who were competing with the market leaders for resources will be garbage collected, effectively leaving only the best and brightest in the business. Remember, mankind as a race is optimistic and progressive. This deflation is all about optimism for the future and we are preparing the base for a new start. This is not about spiralling back to the stone age as Dr. Doom puts it. Maybe he is taking the name, CNBC has given him too seriously.