Clean Shaven Legs Review

Clean Shaven Legs Review

Well, we did it.

We arrived at the end of the year with our limbs intact, our pocketbooks bursting with newly won cash, and our minds… well… sort of.

Anyway, we thank the Great One (not Gretzky) for his help, despite the fact that our mid-year predictions for most markets were weaker than usual. And we take a moment now to review those calls and, of course, to reward those of our readers with the keenest prognosticating acumen with the used Q-Tips that we promised them.


Congrats to all who participated!


Before we announce this year’s victor, let’s look back at our own efforts.

We’ll rhyme ‘em off, and you write in to comment on our performance.

Gold –

We wrote“Expect GLD to be at her former lows of $114 when the bells of New Year come haunting.” In fact, December 31st brought a closing price of $113.58 for the metal’s stock proxy.

Normandy calls that an A+ performance.

Silver –

Our words – “Stepsister silver will not likely see as gruesome a future as gold. We’ll throw out an $18 figure for year end.” Not as good with silver. We give ourselves a C. SLV closed at $15.06.

Natural Gas –

We’re ready to commit hari-kari over this one. We said, “UNG will wind her way higher toward her last retracement high of $26.50 by New Years.” Try $14.77, arse.


Oil –

The only excuse we have here is that no one else saw it coming. We called for $99. We got $53.77.


U.S. Dollar (Index) –

As bullish as we’ve been on the dollar, we didn’t foresee just how wild the buck buying would be. We predicted DXY at 84.17. But investors had a different idea. 90.28 was the close.


But good work from Tim Berglund, who was next closest with his DXY 86.29 call. And a tip of the hat for him on his 10-year yield estimate. He called for a 2.3% return, while the bond finished at 2.17%.

Facebook –

“Everyone’s favorite internet stock is also our pick for bull market poster-child. She’s now at $77.43 and looks anything but overbought. Should tack on another ten bucks by January 1st . Call it $87 even.”

That’s what we said. And indeed, she pushed up over $82. But the year-end close was $78.02.


The Dow –

Last but not least is the broad market, for which we give ourselves a well-deserved A. We wrote – “If the Democrats keep the Senate, Dow 17,450 by the close of the year. If the Republicans win it back… Dow 18,000.”

Final tally, 17,823.

Pretty darn good. But not as good as reader Neil, who cracked the Code with an S&P 500 prediction of 2056. The year-end read was 2058.


Oversights and Overboughts


We didn’t give a long bond or ten year note prediction, and we’re not quite sure why. Call it an oversight. But who would have figured? The damn things soared!

Look here –

This is a chart of the long bond yield (TYX) for the last three years. It shows the former low for yields (and high for prices, which move inversely to yields) as well as the latest action (red circles).

And one has to ask, why?

Why have bonds been such a monumental bet over the last year, returning 28% versus an only 9% gain for the S&P 500?

We thought bonds were due for a fall. We thought the bull market in Treasuries was over.

Apparently not.

There was at least one more run-for-the-roses to be had, and the only question for investors today is, are we done? Is there still more upside for holders of thirty-year Treasuries?


Our take on it runs thus –

Everything depends on equities.

What has fueled much of the panic buying in bonds of late is precisely the panic selling we’ve seen in stocks. And that selling, in turn, has been triggered by the latest steep drop in oil.

We’re facing a problem of an apparently strong, and growing U.S. economy matched against a plodding Europe and Asia. And until we get some better performance data from that side of the pond, we’d guess that equities drift sideways and bonds continue to hold their own.

But the very last thing we’d do at this stage is enter a bond position on the long side. To us, it appears overbought.

Better to buy a PUT spread on the Dow or S&P at this stage and take advantage of the panic.

It’s not over.

And let’s call Timmy Berglund our winner for the year. He was best of a bad lot. (Including us!)

We’ll kick it upstairs to the bosses to decide on which of Wall Street’s waxiest prizes we’ll be bestowing.

Many happy returns,

Matt McAbby, Senior Analyst, Normandy Research

1 comment on “Clean Shaven Legs Review

  1. What a surprise finish to 2014. For 2015, an early bounce in the s/p 500 will end badly at 1760. Gold however will end up at 1430.THe 10 year bond will continue to do well, ending at 1.46.

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