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Ritholtz: I zig when everybody zags

June 8, 2010

INVESTMENT-SUMMIT/RITHOLTZ

The U.S. economy is experiencing an ongoing but slow recovery, says Barry Ritholtz, director of equity research at Fusion IQ. But that’s not stopping him from enjoying discounted prices in a low-inflation environment, at least when it comes to his personal spending habits. The world is on sale if you’ve got the money to spend, he told the Reuters Investment Outlook summit in New York when asked, for example, if he might spend less while on a vacation or forego a purchase or two.

“I am an enormous counter-cyclical spender. At the top of the bull market I don’t want to buy anything. I am a seller into a bull market. We have been buying a ton of stuff over the past year. We got two new cars long before the May…. so we picked up two new cars. We’re doing work on the house. We’re adding a kitchen. I got my wife a very lovely birthday gift. She got me a very lovely birthday gift. We’ve been buying artwork. We’ve buying jewelry. I love to buy stuff when it is on sale. I hate to buy top dollar for it.

“So, we just were in the Cayman Islands on vacation some time ago. We were in Aruba back in December. I’m heading to Vancouver in July and probably take a week or two in the Hamptons. I’m thrilled to spend money in this environment.

“I got an e-mail from a client in the heart of ’08 saying the advise and commentaries have been great but you’re just so relentlessly negative in ’08, you’ve got to say something that makes me not want to commit suicide.

“I said stuff is on sale, go buy stuff. Go buy collectible automobiles, artwork, jewelry. If you want to buy real estate, you are probably early, but if you find a unique property, and as we have seen with some of these so-called trophy properties they’ve come down in price but they don’t plummet the way some condo in Miami is going to plummet. If you find something you really want to get, buy it now. Don’t be afraid to make low-ball bids on artwork. If it is $15 million up from $8 million, bid six and you might get surprised by what happens.

“In this environment I’m happy to tell people, if you can afford it, don’t go out and borrow against the house, don’t leverage yourself, but if you have the ability to go out and spend money and there are things you want and they are significantly discounted from where they were three, four, or five years ago, why the hell not? I would much rather spend when things are cheap than pay up when things are expensive.

“Greece has to be on sale.”

(Photo: Reuters)

Comments

A well spoken capitalist. Too bad only the top 1% has money…

Posted by murfster | Report as abusive
 

That’s so uplifting. Really.

Posted by HBC | Report as abusive
 

Wrong. Too early. The second mouse gets the cheese.

Posted by wisehiney | Report as abusive
 

Oops. He must have forgotten that the vast majority of Americans DON’T HAVE ANY CASH to go out and shop for these great bargains. They are the ones that need to work for less to stay employed thus creating these great bargains for those with too much money! Eat the rich…

Posted by fireturtler | Report as abusive
 

Smart guy, and I like the tag line lol.

Posted by avgprsn | Report as abusive
 

Oh yeah, Barry sure zigs and zags a lot. This guys flips flops with the best of em:

Unfortunately, some people actually track your calls Barry and don’t fall for the BS. Those of us who are familiar with your little games know how you work. You are basically always hedged to win. We’re in a “secular bear” and a “cyclical bull” so you basically can’t be wrong. But within that you write hundreds of articles a month. Some bullish and some more bearish. When you need to you just cherry pick what suits your personal interests.

For instance, back on February 24th 2009 you said that we weren’t even close to bottoming: http://www.ritholtz.com/blog/2009/02/cap itulation-hardly-2/

But then miraculously just two weeks later everything had changed and you were very bullish. You often cite how you “called the bottom”. But then just one month later you were bearish again: http://www.ritholtz.com/blog/2009/04/bea r-market-rally-4/

But then just one month later we’re in a “cyclical bull” market: http://www.ritholtz.com/blog/2009/06/cyc lical-or-secular-bull/

But even throughout it all you’re constantly “hedged” and have protection and “tight stops” on all the time. I mean, even when you were wildly bullish and take credit for the rally you were really only about 60% invested with a HUGE 40% cash position: http://www.ritholtz.com/blog/2009/08/kas s-call-top/

60/40 isn’t exactly a conviction buy call, but in Barry’s “always hedged” world it can be painted however he wants it to be painted!!!!!! Yeay! You are always right. How incredible.

The smart people are on to your scam…..

Posted by trader34342 | Report as abusive
 

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