Stocks are overvalued and vulnerable to a long bear market, housing's a bubble that could explode like a grenade and both inflation and deflation -- take your pick - threaten the economy.
In the world of alternative investment thinking, things are always worse than the prevailing wisdom suggests and the end of the world as we know it is never far off. Do you really need to pay attention to this stuff?
Sure you do. In complex times like these for financial markets, the smart individual considers all points of view and not just those of the investing mainstream.
Before looking at some prime, no-cost sources of alternative investing thinking, let's go over a couple of ground rules. First, don't be turned off by the snarky, superior tone that some of these people use in their writing. It's a hard job being right about things when all those around you are so wrong, so forgive these people their occasional crankiness.
Second, be skeptical. Just as the mainstream investment industry has a vested interest in shaping a positive message about the markets, alternative thinkers make their living by being negative. The truth is out there, somewhere between these two extremes.
An introduction to alternative thinking: If there's such a thing as name-brand contrarian, it's Stephen Roach, chief economist at the Wall Street investment dealer Morgan Stanley. In a weekly report you can read or listen to at no cost on Morgan Stanley's website, Mr. Roach offers a point of view that runs counter to what you'll hear from more his more conventional peers.
For example, Mr. Roach talked last week about what could be "a surprisingly bullish outlook for bonds," even while U.S. Federal Reserve Board chairman Alan Greenspan has unambiguously warned of higher interest rates. Mr. Roach's view is that persistently low global inflation will keep prices in the United States in check.
On the subject of the U.S. housing market, Mr. Roach is a strong believer in a pricing bubble that has flowed out of the overvaluation of stocks in the late 1990s. Some may say that the housing market is legitimately being fed by increased levels of home ownership, immigration and both low unemployment and interest rates, but Mr. Roach says that view is -- to use his term -- rubbish.
Another well-respected alternative voice is Bill Gross, who manages the world's largest bond fund for Pacific Investment Management Co. LLC. Mr. Gross's monthly commentaries are available on the Pimco website and they're a great counterpoint to the conventional commentary on rates, the economy and inflation. In July, for example, Mr. Gross warned of the risk of a recession in the United States and a reversal in the inflation rate that could approach deflation.
Other alternative voices: You have to admire the way Marc Faber gets right to the point on his website, which is named GloomBoomDoom.com and features a painting called Dance of Death on its homepage. An adviser, money manager and author, Mr. Faber publishes commentaries on the site that consider global financial developments and suggest strategies for investors. In a July 5 commentary, he said that while oil prices are likely to decline in the intermediate term, he is reluctant to engage in any short selling because of the risk that the United States will bomb Iran. Mr. Faber is gloomy about the global economy, noting that economically sensitive stocks have performed poorly lately and commodity pricing patterns have shown weakness.
You can get a daily hit of doom and gloom if you subscribe to the e-mail newsletter available through the Daily Reckoning website. The star here is Bill Bonner, an author and publisher who takes pleasure in pointing out what he considers to be the absurd and irrational thinking of traditional market commentators. Mr. Bonner and his fellow writers dissect headline issues such as the real estate market and oil prices, mixing in rock music lyrics, military history and other nuggets of non-financial erudition.
The always useful MSN Money website is the place to go to read the weekly Contrarian Chronicle column written by Bill Fleckenstein. This Seattle-based hedge fund manager is another critic of what he believes to be a U.S. housing bubble, but he's also a bear on the stock market and a believer in buying gold and silver right now.
There are several U.S. fund managers who have built a reputation for contrarian thinking and one of the best known examples is David Tice, who manages the Prudent Bear Fund, a product designed to protect investors in down markets. Mr. Tice's firm also runs the PrudentBear.com website, where you read commentaries, view charts and data and, perhaps most usefully, watch an on-line slideshow that lays out the case for the bearish view on the markets, the case for buying gold (a common theme among investing contrarians) and other related topics.
Other bearish fund managers include John Hussman, a former finance professor who writes a weekly column on the website of his eponymous fund family. Here's Mr. Hussman's succinct summary of the conventional view on stocks: "If you listen to the tenor of investment strategists here, the basic message sounds a lot like what we heard in the late 1990s: Stocks may not be priced to deliver strong returns on a sustained basis, and there are substantial risks in the longer-term picture, but for now, things seem to be going well and so there's no need to be defensive just yet."
His own take on the market: "Essentially, investors are playing hot potato and musical chairs here. Smelling smoke in the crowded theatre, but with the aisles still fairly empty, not willing to miss any of the show until somebody yells fire. It's a dangerous game."
Alternative investing supersites: There are many websites operated by both investing pros and amateurs that act as clearing houses for commentary and data supporting contrarian views. Examples are Fiend's SuperBear Page, where there are dozens of links to articles and data on other websites, and Bear Market Central, a somewhat messy compendium of contrarian thinking. A Canadian entry in the field is HoweStreet.com, a Vancouver-based website that focuses on mining and oil and gas stocks but also has an affinity for alternative stock market thinking. Still another site of this type is Safe Haven, which offers links to half a dozen or so alternative investing articles every day.
One more supersite for alternative investing is Financial Sense Online, which is run by Jim Puplava, a San Diego-based investment adviser and former financial journalist who posted a column on his site recently that offered 10 reasons why there will be hyperinflation in the United States. The ultimate message here: Buy gold.
A little more Canadian content: The Contra The Heard newsletter casts a skeptical eye on the markets, but its main job is to highlight largely ignored stocks that have the potential to deliver big profits. The quarterly newsletter costs $535 a year, but there's no-charge access to columns that previously appeared on the GlobeinvestorGold website.
Where to find commentary with a point of view that's different from what you hear on a daily basis from people on Wall and Bay streets:
Pacific Investment Management Co.
Web site: Pimco.com
Author, speaker, consultant
Web site: GloomBoomDoom.com
The Daily Reckoning
Web site: dailyreckoning.com
Hedge fund manager,
Web site: moneycentral.msn.com Click
"investing", then "commentary"
Prudent Bear Fund
Web site: PrudentBear.com
Hussman Investment Trust
Web site: HussmanFunds.com
Chief economist, Morgan Stanley
Web site: Morganstanley.com/GEFdata/digests; latest-digest.html
Alternative Investing Supersites
Fiend's SuperBear Page
Bear Market Central
Financial Sense Online
Contra the Heard
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