Alibaba: One Year After—Celebrating The Losses

Today is the anniversary of Alibaba’s founders sucking $22 billion out of pockets of US investors. About 40% of that, or $8.8 billion, has already gone to money heaven. The media is full of stories about this firm.

Even after the plunge, 39 Wall Street analysts have a “buy” on the stock, while there is only one with a “sell.” That’s wonderful for experienced contrarians. Shorting such lopsided advice can be very profitable. We predict that eventually there will be “class-action” law suits for lack of disclosure of the IPO.

The Great ‘Fall’ Of China

About three years ago, I wrote the book, THE COMING CHINA CRISIS. The book predicted the sequence, such as record debt, mal-investments, excessive debt-financed speculation in real estate, 64 million empty condominiums, a credit crunch followed by a credit crisis, and then a crash. Furthermore, the book said this crisis would probably envelope the global markets. So far, that seems to be right on track.

Total private, corporate, and governmental debt is now an immense $28 TRILLION. That is 50% more than US annual GDP. Moreover, it is 282% of China’s GDP.

Stock Market: “To Buy Or Not To Buy, That Is The Question.”

Our long-standing upside target for the Nasdaq Composite as a proxy for the stock market has been reached. In our Wellington Letter we have written for the past 18 months that this index would reach the all-time high of March 2000, which was 5,133 intraday, before the bull market would end.

That high was finally reached and surpassed on June 22 and June 23, 2015. But it was for only two days on a closing basis.

The Stock And Bond Markets: A Critical Time

A CNBC survey asked 14 global market strategists to give their year-end target for the S&P 500 index. The lowest forecast was for 2,150 (close on May 28 was around 2120.) Most of the other forecasts were just below 2,300, while a number were above that level.

We remember a Barron’s survey of top institutional money managers in early 2008, just before the global crisis. Not one of them forecasted a decline in the stock market for the year, but the year saw the greatest global crisis since 1929.

They were obviously all very, very wrong.

15 Reasons To Sell Most Stocks Now

The start of the year has been one of the worst ever for the stock market. The bulls have been shaken, but they haven’t given up pounding the tables with their bullish message. We haven’t even seen concern break out, much less bearishness. Such lack of concern and fear in an environment of great excesses is always a flashing yellow light for me.

I look at the technical aspects of the markets, which include ‘sentiment’ and measures of money flow and exposure. Here are 15 warning signals I see for investors in 2015:

Apple: Icon, Icahn or iGone?

The Christmas holiday season will probably help produce an excellent quarter for Apple. After all, it is a technology icon. But it may be their last great quarter for a long time. Shareholders should note that when enthusiasm is highest, and everyone is in, it’s usually a good time to look for the exits. Rather than looking at what is now, investors should ask, “what’s for an encore?” The markets look ahead.

Remember, market tops are made when everything looks best, not when they are bad.