Kedrosky vs. Greenberg: The Textual Replay

My friend Herb Greenberg and I had it (amicably) out on-air today about the bearish blogosphere (with a drive-by from Dennis Kneale and a doomed attempt at refereeing by CNBC’s Sue Herrera).

Here is more or less how it went down, albeit with some, ahem, highly creative and totally self-serving paraphrasing from me:

Sue: Paul, why do you have it in for Herb?

Paul: Herb is a sweet fellow, and a great spotter of broken companies, but the blogosphere demonstrably skews bearish, and Herb is emblematic of that behavior.

Herb: Wait! Warnings! Doom! Danger! Things fall from the sky!

Paul: Sentiment surveys show bloggers skew more negative than “normal” people. Traffic to financial blogs spikes during market troughs, turning them into contrarian echo chambers for the financially disaffected.

Herb: Bearishness is good! I had Coke as a buy was briefly bullish five years ago!

Paul: Being over-early on calls, whether bearish or bullish, is indistinguishable from being wrong. The trouble with being largely bearish — like being perma-bullish — is you’re forced to pretend the short-term doesn’t matter. For people with finite life-spans, it does.

Dennis: Forbes 400! Forbes 400!

Sue: The Internet and blogs are full of noise!

Paul: [And this is my favorite wise-ass remark of the day] Unlike live TV, of course.

Herb: Spplg!

Sue: Okay, thanks everyone!

The end. I may have missed some parts, and I can’t guarantee the quotes are exactly accurate, but you know …  I am working for artistic effect here :-)


  1. Herb Greenberg says:

    Clarification: The Coke was a year ago, if that. In 2002, October, I wrote in Fortune how I had just dipped my toe in with mutual fund purchases at the market’s bottom. Something definitely lost in the translation!

  2. Ah-ha! So I was right about everything else? :-)
    And I fixed the Coke wise-crack …

  3. Perhaps nothing is so fleeting as mood, but can be as long lasting as attitude.

  4. Stopped Clock says:

    I like Herb Greenberg because he spots companies that are overvalued. Short those and go long the market in a dollar neutral way and you’ll probably make money over time.
    I don’t like the Abelsons, the Roubinis, the Shillings, and the Ritholtzs because they always predict recession and market declines. But while they are predicting a recession each year for a decade the market rallies two or three-fold. Following their recommendations is very costly to your wealth because you’ll miss out on 250% gains in order to avoid a 10% loss.

  5. Stopped Clock says:

    I don’t like the Kudlows either. Instead of making an argument against permabears I should have extended my criticism to anyone that is perma-anything and doesn’t react to changing conditions.

  6. franklin stubbs says:

    Food for thought. Part of the raison d’etre is to counteract the heft of the mainstream media, right? To provide an alternative to all the same old hash?
    Given this aspect of things, wouldn’t it make intuitive sense for bloggers to skew bullish, given that Wall Street media outlets have traditionally skewed so mind-numbingly bullish? They didnt call CNBC Bubblevision for nothin’.
    To the degree that the MSM has toned down its inane cheerleading, you have to give some credit to the saner and more cynical voices out there… but that creates a catch 22 of sorts as the sarcasm factor of the blogosphere looks less appropriately counterweighted the more successful its influence becomes.
    Thesis, antithesis, synthesis.

  7. franklin stubbs says:

    Ugh, typing way too fast. Raison d’etre for many financial bloggers. Who skew Bearish, not Bullish. Ye get the gist though.

  8. franklin stubbs says:

    “I don’t like the Abelsons, the Roubinis, the Shillings, and the Ritholtzs because they always predict recession and market declines.”
    Shilling I’ll give you; Roubini I take a pass. But that’s a total b.s. call on Ritholtz. He’s not perma anything, just flexible and forthright. And no I don’t have any personal affiliation with the guy.

  9. I don’t disagree, Franklin. And, to be fair, that was kinda the point that made Sue Herrera made, before, that is, I paraphrased her into marginalia. She mused aloud that maybe the blogosphere is the biz media counterculture — an admittedly unsustainable position in the long run, but not a bad short-run view.

  10. Stop-start says:

    It’s why Kudlow has stopped inviting Barry “perma-bear … stop clock ” Ritholtz on his show

  11. stop-start says:

    Barry’s never wrong ….. just early

  12. Leawoodblues says:

    Agree with Franklin – that the bearish sentiment is just filling a need.
    At least in the blogosphere those voices can be heard, unlike on CNBC, where dissenting opinions are quickly drowned out or cut off (are you listening Kudlow/Ratigan et al. ?).

  13. Stopped Clock says:

    “Barry’s never wrong”
    He has just about the worst stock market forecasting accuracy of any Wall Street pundit!
    “…In first place, with the lowest average absolute percentage error of 1.5% (based on three forecasts), is Charles Mayer. Bringing up the rear, with average absolute percentage errors over 20% (based on four and five forecasts, respectively) are Barry Ritholtz and Bernie Schaeffer…”

  14. Barry Ritholtz says:

    Thanks for the kind words, Franklin.
    But I learned a long time ago to laugh at anonymous cowards like this guy.
    You want to take a swipe at me, anonymously, on someone else’s blog? Seriously, you must have the smallest peepee in the blogosphere . . .
    Paul, pull the guys IP address for me, and I’ll take it from there.

  15. The link to the video clip on is wrong. Instead of the real thing you get a ramble from Kneale about future market earnings. Paul, can you ask them to fix it?

  16. The link to the video clip on is wrong. Instead of the real thing you get a ramble from Kneale about future market earnings. Paul, can you ask them to fix it?

  17. I have found that bloggers such as Roubini, Ritholtz, Calculate Risk, etc help to provide a more balanced view, offsetting the pom-pom waving CNBCs of the world. And I would heartily disagree with Stopped Clock who, above, said that “Following their recommendations is very costly to your wealth because you’ll miss out on 250% gains in order to avoid a 10% loss.” Their writings during the past year should have lead their readers to go long gold and short the financials, as well as the USD, not exactly wealth destroying strategies during this period! I’ve heard for too long from the sell-side Wall Street establishment that an investor is better off being an optimist rather than a pessimist. Whatever happened to the option of being a realist? Why not assess the situation and call it for what it is? This has been far more profitable for me personally than being either an optimist or pessimist.

  18. Sheesh, we’ve been through this before.
    Anyone who’s actually WATCHED CNBC knows they’re not cheerleaders. They might’ve been once, but they aren’t nowadays. Whydontcha TIVO all of their analysts’ interviews for the next week, and watch them all at once on a Saturday. Don’t do it with a pistol and Tequila in the house, or you won’t make it to Sunday.
    Barry’s a permabear, or at least, he plays one on his blog. His occasionally published trading calls are better than his market and economic calls, which are atrocious. Thankfully for his investors, he actually uses some market anomalies and technical analysis in picking stocks, rather than simply playing his macro cards.
    I suspect most of the permabear persona is for marketing purposes. The internet customer demands as much! They are a bearish lot on the internets. In light of that, maybe Barry doesn’t really believe all the BS he writes about the economy? I know he believes SOME of it, because his fund underperformed his managed accounts in 2006, based in part on holding too much cash during the recovery (his managed accounts had to be more fully invested) – as he admitted in his own blog. I do think he plays it up to get attention. Bearishness and outrageous claims (recession NOW! Dow down 30% this year!) are good marketing campaigns, and will make sure you get on TV.
    Permabullism is much smarter than permabearism, although a good trading stance could beat them both. Over the history of the DJIA or SP500, what’s the average 10-year return on permabullishness? How does that compare to permabearishness? In the end, though, it’s not so much THAT you’re bullish, but WHAT you’re bullish on.
    On the MSM front, Faux is all about the “speculum cam.” Nice, but I’d just as soon watch “Skinimax after dark.” It’ll be good when those idiots are off the air. Bloomers is pretty level-headed, as are the overseas products for CNBC. CNBC in the U.S. is just manic-depressive. When the market makes new highs, Erin rides a live bull – when the market makes gurgling sounds, she wears a “recession rat” and every interviewee is asked about the bad economy. If you think that they’re mind-numbingly bullish, I think that your mind is numb.
    The typical blogosphere customer wants bearishness more than the MSM customer does. Why, I dunno, but the evidence is pretty clear. This doesn’t mean the MSM is “bullish” by any stretch of the imagination, it just means that the typical internet customer skews more bearish than other consumers of financial news.
    Being “permanently bullish” on a good asset mix would outperform many funds, eh? Simply holding a fifth of each (domestic and foreign equities, bonds, commodities, and REITs) and rebalancing annually would have beaten all but a few funds over the last decade.

  19. These guys have predicted 36 out of the last 2 recessions.

  20. The typical blogosphere customer is smarter than the MSM customer and can see through Wall Street’s rigged game. That would explain the demand for sources not beholden to the financial industry. The MSM is in bed with teh financial industry to sucker the typical investor.
    And speaking of permabears, many of them have kicked the behinds of the permabulls by investing in gold, up some 300% since 2001, while the DOW is up 10%.