The world beyond stock markets

Apr 8, 2015

- By Bill Bonner

Bill Bonner
Gualfin, Argentina

It's our party
And we'll cry if we want to
- Lesley Gore

Dear Diary,

I would like to thank the many dear readers who wrote with advice for Jorge. He suffers from what doctors think is arthritis, forcing him to retire from the ranch sooner than he would like. We are at the end of a very isolated valley in Argentina, and are not sure which of the proposed remedies will be available here, but we will pass on the suggestions to Jorge.

We'll return to the ranch in a minute, but let's first take a look at the financial markets.

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Stocks were flat in yesterday's trading. The Fed's "shallow" rate increase comment didn't seem to float many boats.

Instead, insiders are selling 22 times more of their stock than they're buying. Foxbusiness:

    "What we're seeing now is a dramatic reversal in that sentiment," says [David Coleman, editor of Vickers Weekly Insider Report], whose firm tracks buying and selling of all publicly-traded companes. "The trend has reversed from what had been historically high levels of buying relative to selling." ...

    TrimTabs Investment Research reports that insiders at public companies have sold $2.6 billion worth of shares so far in June. That's 22 times more than the $120 million in stock they have bought...TrimTabs's 60-day total of insider buying has fallen to the lowest level since December 2004.

What do they see coming?

Bloomberg:

    Last week's news of the weakest hiring since December 2013 rounded off a quarter in which retail sales and capital goods orders all pointed to a first quarter flop. That leaves JPMorgan Chase & Co. estimating growth was just 0.6 percent.
Zero point six percent is optimistic. Economist Richard Duncan puts the first quarter growth figure at 0.1%. And he says the economy may already be in recession.

We'll wait to find out. But it's not as if we have to hold our breath. A stock market sell-off and a recession are coming. They always do.

Not every day at the beach is going to be sunny and bright. Even in California, it's got to rain sometime.

Market corrections are even more certain. People make mistakes. They pay too much. They buy the wrong things. Profits go down. Businesses go broke. Stuff happens.

What kind of world would it be where it didn't? Where even bad restaurants never went out of business? And worthless cellphone apps were never sold off? Where every girl was homecoming queen ...and every war was won - by both sides?

We'll leave it to you to think about that in the dark of night. For our money, we'll assume that things will not always work out as planned. We will bet, too, that a stock market that is at a record high probably reflects a level of optimism that is suitable only to delusional stockbrokers.

Meanwhile, we turn back to the ranch...

You may be wondering why we report on the goings-on at a remote Argentine cattle ranch in the electronic pages of an investment service. We wonder the same thing. And we've never come up with a convincing answer.

Of course, the world of money doesn't stop at Wall Street. And there may be useful insights about money beyond the guesswork, guff and gobbledygook of financial chatter. What happens here is real life...often painfully and expensively real.

Besides, it's our Diary...and we'll write what we want to. Our aim is to make it worth writing and worth reading. Sometimes we hit the mark. Sometimes we don't.

Elizabeth has begun to teach English to some of the young girls. It began when one of them asked to learn English so she could go visit her aunt, who lives in New York.

Then, word got around that the class included cookies and juice. Within two weeks, Elizabeth had six students - all between 8 and 12.

We don't know where this leads, but both students and teacher are working hard.

Talk about hard work! Monday, Jorge took 5 gauchos with him up to the high pasture at the back of the ranch. It is a pasture of about 5,000 acres, so it takes a group of mounted cowboys a whole day to round up the cattle.

That was the easy part. The hard part was spending the night up there. They couldn't come back home because it takes so long to get up there. But last night, they must have longed for the comfort of their simple houses. We have two bunkhouses up in the high pasture. But they are tiny, simple stone buildings with nothing but stone floors...and no heat at all. The gauchos make a fire, cook their rice and some tough meat, and let the smoke go out through holes in the roof. But there are no trees, just sage brush. So the fires are never very hot and never last very long. And it was bitter cold last night.

The poor gauchos - and Jorge - slept on the ground, on the saddle blankets, covered up with ponchos and tarps. They must have tossed and turned...watching the skies, waiting for the first light of dawn so they could get up from their tortures and get to work. Then, they spent the day roping, branding, castrating and marking the cows - about three hundred of them. Then, they mounted up again for the 4-hour ride back down to their houses in the valley.

"How was it," we asked Jorge when he got back last night.

"It was okay," he said with his broad smile. "But very cold. I only got through it by telling myself that this would be the last time I'd ever do it."

"But you'll miss it."

"I'll miss the farm and the cattle, but not spending the night up there. It's too rough."

"Well, you can rest tomorrow. Then, we'll ride up to Tacana."

Stay tuned.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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