Summit Notebook
Exclusive outtakes from industry leaders
Ritholtz: I zig when everybody zags
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.
Debt collecting gets…er, sexy?
Bank employees working in call centers and reminding clients of their overdue loans used to be as far to the bottom of the banking food chain as you could be. Not any more.
Raiffeisen International, the second-biggest lender in eastern Europe, has ramped up staff in its collections and risk management departments.
Active in 17 countries between the Czech Republic and Kazakhstan, it is exposed to a region that is among the hardest hit by the global financial crisis. Rampant loan growth of the last few years has turned into an equally rapid rise of bad debt.
“We substantially increased resources in our call centres, started new ones,“ Martin Gruell, Raiffeisen’s CFO, said ahead of the Reuters Central European Investment Summit in Vienna. “There are 40 percent more employees working in Collections than before the crisis.”
As it is struggling with the rising tide of non-performing loans – they more than doubled in the first half of the year – it has also shifted part of its pool for bonuses to those who are working on saving as much as possible of loans that have become overdue.
“Employees have targets and are getting bonuses depending on how much they are able to collect,” he said. Do they come at someone else’s expense? “Obviously, if there is not such a high demand on our salespeople, bonuses will be lower there.”
And Raiffeisen is feeling that its competitors are doing the same.
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…..