This Time It's Different?

Ahh, that fateful phrase.

I'll keep it short and sweet here, and I'm likely not offering anything that you haven't heard before, so think of this more as a friendly reminder. For the seven years from 1973 to 1980 average annual oil prices rose about 690% or roughly 34% per year during that period. After the peak in 1980, oil spent the next eight years in decline and fell a total of 60%.

Over the past 10 years, the average price for oil is up around 720% (using average price for 2008 as opposed to current price), or roughly 24% per year.

I can already hear people saying that it's different this time because it's not an artificial supply side shock as in the 70s. Ok, could be... but I'm certainly not banking on it.

-AvgJoe

Cramer Addendum

I couldn't help but share this to follow up on the previous blog post. Apparently now banks are a buy? Hmmm...

Don't get me wrong, I share Cramer's new view -- in fact, I own both Bank of America (NYSE: BAC) and American Express (NYSE: AXP). I just find it astonishing that his opinion changed that drastically in so short of a time. I can only assume that's a philosophical difference in investing based on fundamentals and investing based on timing the market.

But hey, how can you not love Cramer?

-AvgJoe

Cramer Calls a Bottom?

I don't know how many people caught this, but I read the same article on TheStreet.com last week. In short, Jim Cramer got ultra bearish last Tuesday saying that there was little hope on the horizon and that there won't be a turn until we see a number of additional, high profile, bankruptcies. From the article:

The bottom line here -- there is too much going wrong right now, too much to put us anywhere near sound footing. I suspect that every rally will be met with selling until we see a multitude of collapses like IndyMac. ... Someone asked me yesterday, "When do we bottom?" I said it wouldn't be until all the banks that have to fail do so and GM files bankruptcy along with Ford. I said it matter-of-factly, because I meant it and because it is obvious.

As we know now, that article perfectly preceded the big rally in financials last week on the back of stronger than expected earnings from bank majors, including Wells Fargo (NYSE: WFC).
This week started off on a good note for the financials as well, with Bank of America (NYSE: BAC) also surprising to the upside.

If you've read much of this blog, then you know I don't do market timing and I won't be the one calling tops or bottoms. But if the market does recover from here, that will have been pretty bad timing for Cramer to have unleashed his inner polar bear.

-AvgJoe

Disclosure: I own shares of Bank of America.